The China Factor

Chapter 6How the Chinese Do Business à la the 5Ps: A Brief Summary

You can be sure of succeeding in your attacks if you only attack places which are undefended.

—Sun Tzu, The Art of War

As we discussed in Chapter 1, China has recently reemerged as a serious contender in the international marketplace. They have had to create a specific penetration strategy to accomplish this, in order to get a foot in the door and establish credibility. China knew that to be a contender it needed to become a known entity and at least be invited to the table when customers were considering vendor choices.

At the risk of oversimplification, what follows summarizes the general strategic approach of Chinese companies (and other emerging entrants) within the framework of the 5Ps. This approach will be examined more closely in upcoming chapters.

Product (Solution and Innovation)

The Chinese have tended toward me-too copies of established incumbents' solutions. Chinese quality levels have historically been good enough, but have recently been improving significantly. As mentioned previously, in the past they were known more for manufacturing and/or delivery of product and less for innovation.

They generally follow the market; they don't lead it. There traditionally has not been a strategy of product leadership. They have focused on replicating—with some customization—and provide minimal innovation. The ability of the Chinese to rapidly develop new products based on customization requests makes China ...