Risks to Business Success in China

USA companies have failed in China because they underestimated the differences in doing business in China versus the USA, thetopdailynews and they lacked a long-term commitment to being successful in China.

China Business Environment – Protection of intellectual property can be challenging in China, along with maintaining USA standards for business conduct. Business law and Chinese regulatory rules may be less clear than in the USA. The role of labor unions and works councils can be quite different than most USA managers might expect and requires an understanding of Chinese cultural norms. thealike

China Government Influence – While China has made tremendous progress in encouraging the development of a market-oriented economy, there are still important business decisions that must be made through collaboration with local governmental agencies. China’s participation in the WTO has improved the ability of USA companies to operate in China, webcorporate but this trend is an evolutionary process that will take time to be fully effective.

Due Diligence in China – USA businesses that fail to meet their goals in China often do not fully consider whether their strategies and core competencies provide a basis for success in China. They may not fully evaluate external factors in China, such as competition, supply chain logistics, playretrogames and local technical and business expertise, which may be critical to a successful marketing or operations plans in China.

Alignment of Strategic and Operational Plans – The complexity of doing business in China requires a long-term strategy for success in China. However, while a long-term roadmap is desirable, a step-by-step approach to entering can minimize risks and maximize the benefits of doing business. Alignment of realistic implementation plans with long-term strategies fibre-in-my-area that take into account the Chinese market environment will reduce mistakes and frustration. The significant benefits of Chinese marketing and operations activity must be balanced against the calculated risks of doing business. Local business partners can assist in investigating both the benefits and risks to your company. Exploratory business tours can provide valuable insight into Chinese market opportunities, and facilitate meeting high-level contacts that can be the beginning of building relationships with key partners to ensure your success. Establishing “Guanxi” relationships with the right people will help ensure a successful venture for your business.

Darrell Wilk is a Global Business Consultant and Instructor at Concordia University in St. Paul, Minnesota, and Argosy University in Eagan, Minnesota focused on Marketing, Strategic Planning, and Global Business Development. Darrell has extensive experience in consulting on China business opportunities. In addition, he instructs Executive Sales Leadership at the University of Wisconsin, featureweb Madison Executive Education.


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