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MATI II Greater China Report

MATI II Greater China Report. Yi Gao December 2, 1999. Executive Summary. Geographical segments in Greater China Singapore Taiwan P.R.China Industry Roadmap in P.R. China Corporate Roadmap in P.R.China Future trends in competition and cooperation. Executive Summary.

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MATI II Greater China Report

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  1. MATI II Greater China Report Yi Gao December 2, 1999

  2. Executive Summary • Geographical segments in Greater China • Singapore • Taiwan • P.R.China • Industry Roadmap in P.R. China • Corporate Roadmap in P.R.China • Future trends in competition and cooperation MATI II Greater China

  3. Executive Summary • Geographical segments in Greater China • Singapore • Taiwan • P.R.China • Industry Roadmap in P.R. China • Corporate Roadmap in P.R.China • Future trends in competition and cooperation MATI II Greater China

  4. MATI II Greater China

  5. Singapore • From manufacturing to e-commerce • Shrinking printed circuit-board business • Vision for high value added, high-tech technology center. • Future threats and uncertainties MATI II Greater China

  6. Taiwan • Leading position in manufacturing • PC motherboard, FPD, LCD production • Shifting technology in modem industry MATI II Greater China

  7. P.R.China • PC boom • Zhong Guan Cun in Beijing • Burgeoning manufacturing center • NEC / Huahong in Shanghai • Legend Group • Dynamic market of the future • More than doubled internet usage since last year. • Will surpass Australia in 2001 as Asia’s top internet user. MATI II Greater China

  8. Executive Summary • Geographical segments in Greater China • Singapore • Taiwan • P.R.China • Industry Roadmap in P.R. China • Corporate Roadmap in P.R.China • Future trends in competition and cooperation MATI II Greater China

  9. Industry Roadmap in China • 3 Stages in business development • Critical issues in business development • Market data collection • Regulatory and legal issues • Intellectual property issues • Technology standard setting issues MATI II Greater China

  10. Stages of high-tech MNC business-building in China Stage I Stage II Stage III Opportunistic experimenter Strategic investor Dominant local player Primary objectives • Small local presence • Learn about market • Learn how to operate and manage in China • Build broader multi-regional or national presence • Preempt competitors by seizing first-mover advantages • Develop substantial local management capability • Secure dominant share of market within industry sector • Shape industry structure and conduct to achieve sustained superior returns Level of commitment Low Very high Extremely high MATI II Greater China Source: McKinsey Quarterly: Second generation MNCs in China

  11. Industry Roadmap in China • 3 Stages in business development • Critical issues in business development • Market data collection • Regulatory and legal issues • Intellectual property issues • Technology standard setting issues MATI II Greater China

  12. Quality / Availability of Data • High cost of market information • Reason 1: Less efforts to collect market data • Reason 2: Distortions of national statistics • Reason 3: Non-disclosure of market data • Reason 4: Higher cost market research because of the fragmented, locally oriented economy MATI II Greater China

  13. Industry Roadmap in China • 3 Stages in business development • Critical issues in business development • Market data collection • Regulatory and legal issues • Intellectual property issues • Technology standard setting issues MATI II Greater China

  14. Regulatory & Legal Issues • High-tech regulations • Singapore’s regulations and policies • P.R.China’s government regulations • On foreign investment • On high-tech product pricing • On joint-venture establishment • Entry to WTO’s impact on high tech industries • Drivers for high-tech regulations MATI II Greater China

  15. Regulatory & Legal Issues • High-tech regulations • Drivers for high-tech regulations • Maintenance of tight ideological control • Protection of local industries • Recent WTO efforts by Chinese government • Lobbying effects by foreign investors MATI II Greater China

  16. Industry Roadmap in China • 3 Stages in business development • Critical issues in business development • Market data collection • Regulatory and legal issues • Intellectual property issues • Microsoft vs. Haisida & Min’an • Technology standard setting issues • Patent issue • Competition MATI II Greater China

  17. Executive Summary • Geographical segments in Greater China • Industry Roadmap in P.R. China • Corporate Roadmap in P.R.China • Technology management and planning • Growth strategies in China • Grow through acquisitions • Grow through partnering • Joint venture establishment • Networking and trust-building • Future trends in competition and cooperation MATI II Greater China

  18. Executive Summary • Geographical segments in Greater China • Industry Roadmap in P.R. China • Corporate Roadmap in P.R.China • Technology management and planning • Growth strategies in China • Grow through acquisitions • Grow through partnering • Joint venture establishment • Networking and trust-building • Future trends in competition and cooperation MATI II Greater China

  19. Technology Management • From early development to more complicated landscape • Transfer of mature technology • Lucent • Cherokee • Tailored technology for local market • Microsoft • Two-way technology sourcing • Legend MATI II Greater China

  20. Technology Management • From early development to more complicated landscape • Transfer of mature technology • Lucent • Cherokee MATI II Greater China

  21. Technology Management • From early development to more complicated landscape • Transfer of mature technology • Tailored technology for local market • Microsoft - Venus MATI II Greater China

  22. Technology Management • From early development to more complicated landscape • Transfer of mature technology • Tailored technology for local market • Two-way technology sourcing • Microsoft & Ufsoft • Legend use ESS as Video Internet Computer Chip set for Venus MATI II Greater China

  23. Growth Strategies in China • Grow through acquisitions • Jabil Circuit vs. GET MATI II Greater China

  24. Growth Strategies in China • Grow through partnering • Different stages, different strategies • Monsanto MATI II Greater China

  25. Provincial Seed Co. Provincial Seed Co. Breeding institute County Seed Co. County Seed Co. County Seed Co. Township Retailer Township Retailer Township Retailer Township Retailer Farmers China Seed Industry National China Seed Co. 1 National Co.: Adm./Import function 30 Provincial Co.: hybrid seed production/distribute 2200 County Co., seed distribute, Variety Seed Production 50000 retailers MATI II Greater China Source: CCAP Policy Brief 98-06

  26. 1 National Co.: Administration./Import function MTC National China Seed Co. Provincial Seed Co. Provincial Seed Co. 2. Access to high level policy making County Seed Co. County Seed Co. County Seed Co. Costs: 1. Still need provincial approval. Township Retailer Township Retailer Township Retailer Township Retailer Farmers China Seed Industry Benefits: 1. Easier for management and communication. 2. No access to local distribution MATI II Greater China Source: CCAP Policy Brief 98-06

  27. 30 Provincial Co.: hybrid seed production/distribute National China Seed Co. Benefits: 1. Easier to get provincial approval. Provincial Seed Co. Provincial Seed Co. 2. Access to local distribution channel County Seed Co. County Seed Co. Costs: 1. Manage and Communicate province by province. Township Retailer Township Retailer Township Retailer Township Retailer Farmers China Seed Industry MTC County Seed Co. MATI II Greater China Source: CCAP Policy Brief 98-06

  28. Partnering Strategic Solution Province by Province Rollout Form partnership with local seed authorities and businesses in key provinces (MTC/D&PL/Local) D&PL contributions - Bring varieties with Bollgard - Seed production expertise Local partner contributions - Local influence in regulatory and business - Access to distribution MTC contributions: - Technical support - Marketing, planning and analysis Regulatory approval province by province MATI II Greater China

  29. Growth Strategies in China • Grow through partnering • Microsoft’s Venus KANKA MATI II Greater China

  30. Growth Strategies in China • Grow through partnering • Different stages, different strategies • Microsoft’s Venus • Joint venture establishment • Relationships and its cost/benefit • Networking and trust-building MATI II Greater China

  31. Future Trends in Competition and Cooperation • Emerging local competitors in standard setting • HDTV • Hopen - Chinese-developed OS • Collaborative R & D • Singapore • IBM, HP and Compaq • China • Bell lab, Texas Instruments MATI II Greater China

  32. Executive Summary Revisit • Geographical segments in Greater China • Industry Roadmap in P.R. China • Corporate Roadmap in P.R.China • Future trends in competition and cooperation MATI II Greater China

  33. Everything is possible, nothing is easy. Dr. Wei Wang CEO of Siniwest Holdings

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