I spent all day yesterday co-chairing a Doing Business in China Seminar and I suspect that I will be doing a number of posts on that over the next week or so. I’m starting at the start though, with who should be going into China and why. Ben Shobert of Rubicon Strategy Group gave a fascinating and highly informative talk on China healthcare/China senior care. At one point in his talk, Ben went into MBA mode (he has an MBA from Duke, so this is excusable) and talked about the analysis companies should use to determine whether they should be going into China.
Before he talked of this, however, Ben attributed at least some of his thinking on this to a book, The China Ready Company, by Steven Ganster of Technomic Asia and Kent Kedl of Control Risks. Ben called that book the best he had read in terms of determining whether it makes sense to go into China, or not. I read that book many years ago and I wholeheartedly agree.
Ben had this to say about what it takes for it to make sense for a company to go into China:
- China should be a strategic, not purely opportunistic, pursuit.
- The decision to go to China should reflect a holistic appraisal of internal capabilities, financial resources, and risk appetite versus other domestic or foreign investment opportunities
- The process of choosing should allow key management team members and other stakeholders to ask questions, raise concerns, and feel their input has been sought and incorporated into the final decision.
- If a decision to go forward in China is made, your management team should have several different market access strategies presented with a comprehensive analysis of each, along with an idea on how to properly market your services to the Chinese consumer.
- Question 1: Do we, as a company (management team & ownership) have the bandwidth and cultural DNA to export our business model to China’s emerging healthcare economy?
- Question 2: If yes, what is it going to take to export our business model? This is a resource and process question that isn’t specific to China
- Question 3: Could we more easily export our business to another country versus China? Here, the analysis begins to get China- specific, but also is looking at opportunity costs for China.
- Question 4: If China is the right choice, what will it take to successfully export our company to China? What should we be prepared for, what can we do to avoid the typical China market entry errors specific to the healthcare industry?