Comprehensive information for New Zealand food and beverage companies doing business in China. Special thanks to Otago University and NZTE
PRINCIPLE FINDINGS FROM THE REPORT
The principle findings of this study, thus far, are as follows:
• New Zealand companies need to make time to investigate and conduct market research before proceeding with any market entry strategy.
• Understand which market segment they wish to target, who their competitors are, the market trends which are evolving and the risks that the market poses.
• New Zealand companies need to enlist the support of the NZ government officials and through them Chinese local and central government officials to ensure that their objectives are in alignment with the policy objectives of the Chinese Government both local and central.
• New Zealand trade and diplomatic officials must be thoroughly conversant with the policy objectives of local government and have effective communication channels between themselves and local government officials. They must also be conversant with Central government policy and be able to readily access information channels to follow the development of central government policy objectives.
• It is vital that New Zealand companies have a contingency strategy in place prior to entry. That is, ensure that exit rules have been at least thought through if not developed.
• Enter the market with a long term perspective and be committed to tackle the hurdles when they present themselves. It is important that New Zealand companies think not five years ahead but fifteen to twenty.
• Ensure a balanced recruitment strategy, ensuring the employment of local indigenous staff, alongside expatriate staff. The employment of local indigenous staff with bilingual skills is an obvious asset.
• It is important to overcome the language barrier. New Zealand companies need to ensure that effective and timely communication systems are established. Open communication with the Chinese partner is important to the ongoing development of the relationship and integral to smoothing out any problems which may arise.
• Cultural empathy and understanding is important, New Zealand companies must accept and understand the ways of their Chinese partners and embrace the cultural differences with understanding, tolerance and pragmatism.
• New Zealand companies should look at where they can offer assistance and add value to their Chinese partners, opportunities to work more closely with partners enables firms to better understand the nature of business in China. Moreover, it fosters goodwill within the partnerships and plants the seed of trust.
• New Zealand companies need to be highly vigilant in maintaining superior quality Food and Beverage produce standards, in order to protect and enhance the New Zealand brand / image.
• It would appear prudent and advisable for New Zealand Food and Beverage Companies to work together to where possible to facilitate greater synergies and lift the profile of New Zealand in China and the wider Asia markets.
In conclusion, if the optimists are correct, China will move inexorably toward a free market economy during the next decade. Competition will increase and foreign free-market influence will support this process. However because of China’s geographical, political, and economic complexities, China’s transition to a full market economy is yet to be accomplished, for example the establishment of clearly defined property rights. Therefore, we believe that for the foreseeable future there will be a continuous evolution in the institutional arrangements that support a market economy. This suggests that the key success factors identified in this research are likely to remain valid for the foreseeable future.
CLICK HERE FOR FULL REPORT
