I love baseball and basketball and I like football. What I most like about football is that any idiot (myself included) can on Monday morning blame such and such loss on such and such coaching shortcoming. You can, of course, do that in baseball and basketball as well, but it just ain’t quite as satisfying.
Monday morning quarterbacking, that’s me.
Oh, and I love doing it with trials to. The OJ trial? I would have won that one for the prosecution because I never would have done the cross of OJ like that. The William Kennedy Smith rape trail? There’s a reason I stayed up watching just about every bit of it: so I could tell you why I would have won it by destroying Ted Kennedy, not kowtowing to him.
Seriously though, I know for a fact that I’d make a lousy football coach (because I was a lousy basketball coach and I know that game ten times better than I know football) and I do not really believe that I could have changed those two famous criminal trials by dint of my great lawyering. But hey, it’s fun to talk about it.
Consultants and journalists love to talk about foreign companies that fail in China. Why? Because doing so shows how much they know and how they would have done things so differently and so much better. Yeah, whatever.
CNBC did a doozy of a story explaining to China neophytes exactly how dumb various big companies were in failing in China. The big companies being, Ebay, Home Depot, Mattel/Barbie, and Google. Problem is that I am just not at all convinced.
Let me explain.
Home Depot. The article talks of how Home Depot went into China and failed because it just didn’t know China is “not the land of DIY.” According to the article, Home Depot opened 12 stores in China in 2006 and closed everything down six years later, leaving with its tail between its legs.
Really? First off, China is difficult for any foreign retailer. Retail in China is both very different from the United States and not at all easy or inexpensive. Home Depot’s retail operations in China did not succeed; that is obvious. But what is not obvious and what is not mentioned in this article is that Home Depot buys a helluva lot of product from China and, near as I can tell, they are real pros at this. Also not mentioned is what Home Depot actually lost in dollars in China and how those dollars stack up to its earnings. I do not know the numbers here, but I would bet that Home Depot’s China venture was but a blip on a blip for the company overall.
And nobody mentions what Home Depot should have done instead of trying China with twelve stores? Should it have conducted marketing studies? I’m skeptical that would have revealed much. Maybe those twelve stores were its marketing study. Big companies do that sort of thing all the time. Why not if you can afford it? I mean, Home Depot might have spent millions on surveys and marketing studies and focus groups and all that stuff and still have not really known whether its stores would have failed or succeeded without having actually having opened a few of them. I give Home Depot credit for having the guts to go into China first. It might very well have worked out. It didn’t. So what? Does anyone really believe that had Home Depot not gone in we wouldn’t be reading articles quoting pundits criticizing Home Depot for being overly cautious and missing out on 1.3 billion customers?
Mattel. The article rags on Mattel next for having spent $30 million dollars opening a Barbie store in Shanghai. Just by way of a bit of comparison, Mattel’s revenues in 2012 were about $2.1 billion dollars. So spending $30 million on a store that didn’t work (who knows how much Mattel lost in total on this store, but I would guess it was less than $30 million not more) is just not a big deal. And again, let me make clear that Mattel, near as I can tell, is a huge success in China. One store didn’t work and was shut down, but Mattel toys seem to me (from my own observations) to be doing just fine in China and, despite a few hiccups, Mattel buying from China seems to be doing just fine too. It also would not surprise me a bit to learn that Mattel learned so much from its failed store that its increased sales of Barbies to China alone increased by more than the amount it lost on this store. And again, are we to blame Mattel for having tried this? I sure don’t.
Ebay. In the article, an Ebay spokesman says that “It’s frustrating that people say we failed in China…. [because] from our perspective, we now have a very successful, large, and continuing-to-grow export business.” For all I know that is true. Maybe Ebay’s business in China evolved and is very different from its more visible businesses elsewhere. Which leads me to the next company in the article, Google.
Google. The article says that companies must either do what might be considered “unsavory” or get out. But that simply is false and Google itself is proof of that. I ate in Google’s Beijing cafeteria not so long ago and if the quality of its free food and its bustling and lively cafeteria are any measure, Google-China is doing just fine. And if the people I know who worked at or still work at Google China are any indication, Google knows exactly what it takes to succeed at doing business in China, the Google way. Would it really have made sense for Google to have changed its ethics and its business methods for just one country? What about the impact that would have had on Google employees and customers everywhere but China? Did this article even consider that? Of course not.
Yes, Google search does not have the same percentage of usage in China that it does in the United States, but Google is selling Google ads in China and presumably making big bucks by doing so. Google is a lot more than just its search page and whomever wrote this article should have done at least some investigation into what Google is actually doing in China before proclaiming it a total failure there. Full Disclosure: I am a Google stockholder.
Be wary of the China consultant who publicly criticizes. Or at least realize that he or she is probably doing so as a marketing device more than anything else.
I can’t wait until Monday.
What do you all think?