Chinese manufacturing enterprises face many challenges when going global, such as a lack of in-depth understanding of the policies and regulations of the target market, political stability, trade frictions, etc., and it is difficult to predict potential risks. At the same time, it relies too much on the experience of the domestic market and fails to accurately grasp the local market preferences and consumer needs of the target country, resulting in market strategy mistakes. Different countries and regions have differences in religious beliefs, work philosophies, lifestyles, thinking patterns, etc., which may lead to problems such as communication barriers, difficulty in employee motivation, and low efficiency of teamwork in local business and management activities. To help Chinese manufacturing companies better meet these challenges, KPMG provides advice on markets, products and services.
New Market Exploration and Strategic Positioning: Multi-dimensional Screening and Precise Planning
KPMG pointed out that in recent years, the manufacturing industry has been a pillar industry of China's economic development, and related enterprises have accelerated the pace of going overseas under the new pattern of domestic and international dual circulation. However, companies also face higher risks in the process of expanding overseas markets. From a macro perspective, the main risk points include political stability risks, geopolitical risks, economic development risks, social and cultural risks, etc., therefore, macro environment research is a necessary prerequisite for China's manufacturing industry to invest overseas.
According to KPMG's analysis report, China's manufacturing industry is currently mainly using greenfield construction or joint venture models, covering multiple links such as preliminary inspection, field research, fund raising, personnel recruitment, factory operation and enterprise exit, etc., and designing a number of different departments to dock, enterprises can first screen out areas with national entry feasibility, and then further conduct in-depth analysis of industries and projects in these regions, and finally select high-quality projects with great industrial development potential.
In addition, China's manufacturing industry needs to continuously absorb and integrate external advanced technology, strengthen its own technological re-innovation capabilities, in order to occupy a place in the global technology competition. R&D investment plays a vital role in technological innovation, and China's manufacturing investment in R&D is still insufficient compared with some developed countries, which limits the speed of technological progress. Therefore, increasing R&D investment and encouraging enterprises and research institutions to carry out technology R&D is the key to improving the level of technological innovation in China's manufacturing industry. Chinese manufacturing companies are actively implementing a multi-point strategy across continents to diversify risks and diversify their business by exploring new markets and filling supply chain gaps. At the same time, companies are increasing their investment in emerging markets such as Southeast Asia, the Middle East and Latin America, and continue to deepen their investment in traditional markets such as Europe and Africa.
Figure: How China's manufacturing industry can better cope with the challenge of going global
From the perspective of policies and regulations, China's manufacturing industry can pay attention to the guidance of trade policies and examine the tariff policies and trade barriers of the target market. For example, some European and American countries have imposed high tariffs on Chinese steel products, which has hindered the export of relevant steel manufacturing enterprises, but if they turn to some countries or regions with free trade agreements with China, they can enjoy tariff reduction and exemption and open up new sales channels. Understand consumers' preferences for product features, design, brand image, etc. through market research. For example, European consumers pay attention to the simple design and environmentally friendly materials of home furnishing products, and if Chinese furniture manufacturers want to enter the European market, product research and development need to move closer to this direction; U.S. consumers have extremely high demands for innovation and convenience in electronic products, and Chinese electronics companies need to continue to innovate. It is also necessary to assess the saturation of the target market for a particular product or service, and to avoid excessive competition; Taking smartphones as an example, in mature markets such as Europe and the United States, where there are many brands and fierce competition, new Chinese entrants need to rely on unique selling points such as ultra-high costs performance and cutting-edge camera technology to compete for a place. In some emerging markets in Africa and South Asia, the penetration rate of smartphones is still low, and there is a large market gap.
For enterprises with a high degree of product standardization, acceptable brand awareness and a relaxed trade environment in the target market, direct export is a convenient way. For example, China's lighter manufacturing enterprises, with mature technology and low-cost advantages, directly export products to Europe, America, Africa and other places, and use the local dealer network to quickly distribute goods. On the one hand, strengthen the international training of internal employees, including language, cross-cultural communication, international business rules, etc., and cultivate compound talents who understand both technology and the international market; On the other hand, we actively introduce overseas high-end talents, especially in key areas such as technology research and development, marketing, and strategic management, and use their experience and resources to promote the internationalization process of enterprises. For example, Midea Group has introduced top foreign technical experts to help it make technological breakthroughs in the field of smart home.
Through all-round and multi-dimensional screening of new markets, combined with precise and meticulous strategic planning, Chinese manufacturing enterprises can accurately anchor the direction in the wave of globalization, ride the wind and waves, and open up their own international market territory.
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