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Prying Open China's Computer Market
License Approval: Pharmaceuticals
Market Entry: A Steel Giant Expands its Horizons
China Concept Research
Prying Open China's Computer Market

Our Challenge: Help our client acheive a leading position in China¡¯s domestic computer market despite high barriers to entry
  • Client: A major multinational computer hardware manufacturer (¡°ComputerCo¡±)

  • Our Mission: To develop and implement a market entry strategy for ComputerCo¡¯s manufacturing operation that focused on facilitating access to China¡¯s domestic market.  The goal was to gain market leadership ahead of the client¡¯s global competitors.

  • Obstacles
    • Foreign invested enterprises were required to export a large majority of their manufactured goods, thus limiting access to domestic market
    • Export requirements were strictest for joint ventures (JVs) where foreign side had a majority stake and associated management control
    • Industry was plagued by widespread illegal imports, harming legitimate players and impeding industry¡¯s development
Our Approach: The project used a three-pronged approach highlighting our integrated methodology combining research, strategy and implementation.
  • Research (Industry Intelligence Group)
    • Policy Review: Detailed research of official policy in order to identify the main issues causing concern to the Ministry of Electronics Industry
    • Market Research: Analysis and assessment of major domestic markets by geography and key operational and management issues
  • Strategy (Business Strategy Group)
    • Site and Partner Analysis: Found and recommended JV partner and location.  Based analysis on market and policy research, including details such as local incentive policies, supply chain location, and availability of qualified staff

  • Implementation (Corporate Diplomacy Group)
    • Government Communications ¨C Strategy: Based on policy research and discussions with influential government players, China Concept developed a central message to convince government regulators to grant ComputerCo access to the domestic market
      • The Message: ComputerCo could offer value to the development of China¡¯s computer industry through stable, legal operations that would compete with and soon dominate illegal imports.
    • Government Communications ¨C Implementation: China Concept used its contacts to introduce ComputerCo to key government stakeholders at the national and local levels
      • Central Government: China Concept facilitated private negotiations with the Central government and presented ComputerCo to the highest levels of government through a widely publicized reception attended by 50 minister-level officials
      • Local Government: On the local level, China Concept handled negotiations over the JV set-up, local incentives, key operational issues, and, most importantly, the percentage of manufactured computers that could be sold domestically.
Our Results: Favorable market entry terms and market share leadership
  • Favorable Market Entry Terms
    • Right to the industry¡¯s highest level of domestic sales as a percentage of total manufactured output
    • Guarantee of management control in JV
  • Market Share Leadership
    • ComputerCo quickly attained market leadership and held the number one sales position in China for five years