中国企业海外扩张的启示分析 Overseas Expansion of Chinese lessons.ppt

LENOVO,IBM PC,LENOVO,(New),2,Overseas Expansion of ChineseBusiness:Lessons and ChallengesMing-Jer Chen,Ph.D.Darden Graduate School of Business,University of VirginiaChinese University of Hong KongBeijing Symposium:China in Global EconomySeptember 19,2006Making Sense of Three Recent ExpansionCases,LENOVO,LENOVO(New),IBM PC,PublicResistanceHigh MediaExposure,Mute AmericanBusiness,Veto onCapitol Hill,Timing,InadequatePR&BrandPromotion,Post-MergerIntegrationConcerns,InsufficientOverseas M&AExperience,Chinas(re-)emergence:from manufacturing and exporting to overseas expansionCopyright 2006 Ming-Jer Chen.All rights reserved1,Source:UNCTAD,FDI/TNC,MOFCOM,AsiaPacificBulletin,Source:Accenturereport,FortuneMagazine,8,7,3,4,Chinas Outward Foreign DirectInvestment(OFDI),6543210,Stage 1,Chinas Annual OFDI($Bn)Stage 2 Stage 3,Stage 4 Stage 5,1979,1983,1992,1999,2002,2005,Chinas Accumulated OFDI($Bn)6050403020100,1979,1983,1992,1999,2002,2005,Chinas OFDI has increased sharply over the last 25 years,with 31%compound annual growth rate(CAGR).Copyright 2006 Ming-Jer Chen.All rights reservedChinas Global Business Profile,BrazilRussia,20,IndiaChina,11,11,15,16,4,2,1,4,3,1,4,3,4,3 3,5,4,5,6,2002,2003,2004,2005,2006,Number of companies in BRIC economies listed in Fortune Global 500There has been an increasing presence of Chinese enterprises in the global elite club.Copyright 2006 Ming-Jer Chen.All rights reserved2,Source:MinistryofCommerce,EIU,BusinessWeek,Source:China-CBN.Com,companywebsite,5,6,Chinas Outward M&A,2.30,ChineseAcquirer,TargetCompany,Country,Price($Mn),Industry,1.18,Completed Deal,0.20,0.83,LENOVOTCL,IBM PCTHOMSON,USAFrance,1,750559,PCHomeAppliances,2002,2003 2004Chinas Outward M&A($Bn),2005,ChinaMinmetalsCNPC,NORANDAEnCana,CanadaCanada,5,0001,400,MiningOil,Financials,1%Industrials,7%Telecoms,11%High-tech,33%,Others,2%Natural Resource,46%,NAGCNOOCFailed DealCNOOCHAIER,MG ROVERNigerian OilUNOCALMAYTAG,BritainNigeriaUSAUSA,8.72,70018,5001,280,AutoOilOilHomeAppliances,Chinas Outward M&A by sector,2005,ChinaMobile,MILLICOM,Luxembourg,5,300,Telecom,Recent history has been marked by some high-profile successes-and failures.Copyright 2006 Ming-Jer Chen.All rights reservedEnterprise Overseas Expansion:A Snapshot of Two Cases,60%50%40%,60%50%40%,41%,58%,30%20%,16%,22%,30%20%,21%,27%,10%,6%,8%,10%,10%,11%,0%,0%,2001,2002,2003,2004,2005,2001,2002,2003,2004,2005,%of International RevenuesLeading Chinese enterprises have dramatically increased theinternational composition of their corporate portfolios.Copyright 2006 Ming-Jer Chen.All rights reserved3,Source:USQresearch,EmeraldManagementXtra,FINANCING,Capital shortag,CULTUREE,tiondiversity,diversity,tion&policies,Foreign regulation,trade barriers,BRANDD,access toto ma,access market,TALENT,Human capital,glo,ntnt team,7,e,t,l,12000,8,Hurdles for Overseas Expansione,financialrisksCulturalalintegrationPOLITICSS&policies,trade barriersBrandrecognitionrkechannelslsgloba manageme teamCopyright 2006 Ming-Jer Chen.All rights reservedOverseas Expansion Hurdles:Talent,“China will require 75,000 top-level,Annual MBA Intake in China,15,000,18,500,executives with global experience by 2010,about 70,000 more than it has now.Without,them,the future is uncertain.”(McKinsey&Co.),74,86,1000,1984,1991,1993,2000,2002,2005,CHINESEMNCs,TALENT,FOREIGNMNCs,StrategicPerspective,Cross-Culture/MarketAppreciation,Multi-FunctionalExperience,ExecutionCapability,How effectively can Chinese enterprises deal with talent shortage and escalatingcompetition for talent as they expand aggressively overseas?Copyright 2006 Ming-Jer Chen.All rights reserved4,9,10,Overseas Expansion Hurdles:Brand,China,Global,The top 100 global brands:US(51),Japan(8),Korea(3),China(0).Building a brand takes time and considerable investment with noimmediate tangible returns.Building a global brand requires a different mindset from what it hastraditionally taken for a Chinese enterprise to be successful.How easily and quickly can Chinese enterprises overcome the global brandinghurdle?Copyright 2006 Ming-Jer Chen.All rights reservedOverseas Expansion Hurdles:Politics,“Undue Fears of China Inc?:As we seemore Chinese companies seeking mergers,the political factor will get bigger.“(GlobalEnvision,10/21/05),“Wake Up to the Chinese Threat:Its timefor the sleeping giant(US)to wake up andrespond to the very threatening rise ofcommunist China”(The Hill,06/28/06),Do not underestimate potential socio-political resistance to overseasexpansion,which is a natural part of the battle between incumbents andnewcomers.Perceived invading/retaliating,or winning/losing,will create moreobstacles on the political front.Chinese enterprises need to proactively manage political and regulatoryconcerns.The double-edged sword of the Chinese government:How involved should it be,andwhat role should it play,in overseas business activities?Copyright 2006 Ming-Jer Chen.All rights reserved5,Source:Ernst&Young/ThomsonFinancial,Hooves,11,HK,HK,HK,12,Overseas Expansion Hurdles:Culture,Tradition,Modernization,China:5,000 going on 25Chinas“re-emergence”and the Wests“unreadiness”create a gulf.The dual challenge for Chinese enterprises is to develop a forward-lookingglobal business model while connecting to Chinese history.Clearing cross-cultural hurdles and bridging cross-border social practicesshould be high on corporate agendas.How can Chinese executives blend“people based”and“system based”management styles in globalization?Copyright 2006 Ming-Jer Chen.All rights reservedOverseas Expansion Hurdles:Financing,344,Top OverseasChinese IPO,Capital Raised($Mn),Exchange,Year 2006,Bank of China,11,200,HK,45,46,Year 2005,New York London Hong KongNumber of Chinese Firms Listed Overseas,China Construction BankChina Shenhua EnergyBank of Communications,9,2273,2762,165,China COSCO Holdings,1,227,HK,“As more and more Chinese companies aregoing abroad to compete,the difficulties infinancing their overseas operations preventthem from growing bigger and stronger.”(Chinas State Administration of Foreign Exchange),Year 2004Ping An InsuranceSMICAir China,1,8391,8031,238,HKNYSEHK,How can Chinese enterprises secure financing to fulfill their global ambition?Howcan they balance the interests of diverse stakeholders in China and overseas?Copyright 2006 Ming-Jer Chen.All rights reserved6,13,14,Concluding Thoughts,Management know-how,managerial talents,and brand are,imperative for Chinese global business expansion.,Cross-border M&A is a new ball game for Chinese enterprises,and it often takes time to determine the true winner(or loser).,Setbacks are part of the process of overseas expansion,and one,should learn from the process.,Chinese enterprises need to look from the“local”viewpoint and,appreciate the domestic socio-political concerns.,The right timing,prudent speed,and alignment of business savvyand socio-political sensitivity are particularly vital for securingoverseas business deals.,Copyright 2006 Ming-Jer Chen.All rights reserved,Thank you,Ming-Jer Chen,Ph.D.Leslie E.Grayson Professor,The Darden Graduate School of Business,University of Virginia,P.O.Box 6550,Charlottesville,VA 22906-6550,U.S.A.,Phone:+1-434-924-7260/Fax:+1-434-243-7678,Email:chenmdarden.virginia.edu,Copyright 2006 Ming-Jer Chen.All rights reserved,7,