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Companies pursuing an increased presence in China have had a wide of results. Small and mid-size USA companies have had tremendous success in China creating great value for their customers, employees and shareholders. Other USA firms have struggled or failed to get results in China. Small and mid-size USA firms are expanding their business with China to be close to their customers in the China, and to take advantage of favorable cost and financial incentives for doing business in China. The following key success factors must be managed to have successful business venture in China. Realistic Business Expectations - Avoid Frustrating Mistakes! USA fast paced business expectations can create frustrating negotiations and unrealistic initial goals for ventures in China. Chinese negotiators use time more deliberately during business negotiations than is typical in the USA. In addition to normal business factors, the influence of various Chinese governmental agencies and different legal requirements can affect the timing of projects and realization of results. Having a head-start with a local Chinese ally can provide support sorting through bureaucratic and cultural barriers. Chinese Perspective - Navigating through Rapidly Changing Environment! Visiting China for face-to-face meetings with local business partners and potential customers is important to gain both market knowledge and perspective on doing business China. It can also start the process of developing key personal "Guanxi" relationships. It's not unusual for USA firms to consider legal agreements as the perquisite for conducting business. In China, it is much more common to consider personal relationships a perquisite to establishing binding legal agreements and business relationships. Understanding Chinese cultural and business practices can avoid damaging mistakes. Personal Relationships ("Guanxi") - Critical to Success! Developing strong personal relationships with Chinese customers and partners is part of Chinese business culture on how to get results in China. These relationships can months or years to develop, and can be accelerated by the selection of the right local Chinese partner. Establishing a strong relationship is critical and can be more important than any legal agreement. This is true of business partners, employees, customers, and suppliers as well as governmental agencies. Key Chinese government agencies still have a major influence on businesses operating in China. Directly and with local partners, USA firms need to establish these Chinese "Guanxi" relationships in addition to more traditional business activity. Market Knowledge - Essential to Achieving Goals and Plans! To ensure a successful venture into China, small and mid-size USA firms should thoroughly understand the external and internal market factors in China, have well defined strategic and implementation China plan, and solicit support of local business partners to avoid start-up risks. Chinese markets and operation can be complex. However, there is significant data available from private and government sources on China marketing and operating opportunities. Professional investigation of various market and operational developments in China, familiarizing yourself with different aspects of Chinese law, and deciding on a partnership, merger or an acquisition that may be appropriate for your business is essential to achieving results. Implementation Plans - Relentless Focus on Results! The importance of aligning Chinese deployment plans with long-term targets in China is similar to the need for business alignment in the USA. The key to a successful business in China is an overall Chinese business strategy, policy, implementation plans and performance goals that are updated on a continuous basis. It is important to understand where your business has been, where it is now in China, and where it needs to be in the future. There can be implementation obstacles that are unfamiliar to small USA business leaders, such as, special logistics and transportation issues, currency issues, taxation issues, and other governmental factors. So, an independent view from China can be vital for a clear, fresh and objective assessment of business strategy, policy, performance, and potential in China. There is an explosion of Chinese business partners assisting USA firms do business in China. As a result, there are professional Chinese partners to help develop and implement your plans in China. Once the key elements of your Chinese deployment plans are defined and deployed, regular business reviews will keep your plan on track to success.
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