As They Say … In China Everything Is Possible. But Nothing Is Easy.
May 19th, 2008
I have been watching and studying some of the US business schools who have entered the China MBA market for some time now (joint executive MBA programs are the usual market entry strategy). One such school is the University of Maryland Smith School of Business; an excellent business school with excellent programs, students and faculty and with loads of money to do great things (they are not scared to charge market rates).
For example, click HERE to learn about what schools like Smith are doing in China with their executive MBA program. It seems that each week I get a high quality marketing brochure in the mail from Smith re: one of its programs and said brochure, just one of them, must cost at least as much as my entire marketing budget for all of our Cal Poly Orfalea College of Business graduate programs.
Well, even the big boys falter. Smith just closed up it’s executive MBA program in Beijing (only); it looks like its much larger and well known Shanghai program is alive and well. Other B-schools are also struggling. See this May 15, 2008 Business Week article that just came out, China: Why Western B-Schools Are Leaving. Yet another good example of how local Chinese (in this case Chinese MBA programs) can replicate and achieve quality quickly, thereby making things miserable for the early foreign market entrants.
The money quote in this article:
Thirty Chinese universities are now authorized by Beijing to provide executive MBA programs. “The Chinese schools are coming right at the teeth of what I offer,” says Gary Gaeth, the associate dean of the University of Iowa’s Henry B. Tippie School of Management, which will start a program with the highly regarded Peking University this year. “And their MBA programs are every bit as good as everyone else’s.”
Oh, how that market and invisible hand can quickly swing the other way.
Yes, in China, when you make it you can make it big. But when you lose, well, you know the rest of the line. In China, experienced and knowledgeable expats will tell you, “Here, anything is possible. But nothing is easy.”
Entry Filed under: China, Pre-Departure, Shanghai, Beijing
7 Comments Add your own
1. Simeon Trieu | May 20th, 2008 at 12:38 am
The issue with China is that it is constantly changing… and changing quickly. It is difficult to stabilize a company in China due to the widely varying factors. For example, the legal system in China is far from developed. It is one of the major crippling points of China. They are working on it, however, but amendments to current laws can be both confusing and devastating to profits and property. Even if joint-venture is the best and easiest way to start a B-school, it’s still not an easy thing to do in China.
2. Robyn Bowie | May 22nd, 2008 at 9:31 pm
I’m glad to hear that other universities are starting to do programs like this. Perhaps someday we too can partner with a Chinese university. Although, honestly I am more interested to see how they do business over there through our trip where we actually go and see it firsthand. Learning about it in the classroom is great and all, but it can only take you so far.
As for the problems that universities are running into regarding the way China works, I think that most people underestimate the difficulties they may endure. Many just see China as this great emerging market with plenty of opportunities and don’t think about the problems created when you need to take the money you make in China out of China. Also, as Dr. Carr said today, China is making the visa process even more difficult as a way to purge themselves of ex-Pats who aren’t benefiting them. China isn’t dumb. It is aware of its potential and the draw it has on foreigners, but its not going to give up its gold that easily. Times are changing and it seems things are only going to get harder.
3. WhiteDuskRed | May 25th, 2008 at 9:20 pm
Firstly let me introduce myself. I’m a Singaporean working for a Japanese firm in HK and southern China region. I speak and write English, Mandarin and Japanese. Can speak decent Cantonese. This is a great blog and I really enjoy the reading experience.
Firstly we have to ask ourselves what the western B-schools can bring to China. Apart from a brand name which is recognisable and familiar to western CEOs and executives, it is basically an MBA conducted in English. Considering that almost all foreign ventures in China are joint ventures, it is highly possible that the person doing the recruitment are locals and/or are more familiar with the credentials of Chinese universities.
I think it will be a better idea to sell an MBA for Chinese OUTSIDE of China. Those who can afford an MBA in China will prefer to study outside of China. The rich will want to set themselves apart and learn how things are being done in the western world. Market in China but keep the money outside.
There’s no such thing as an MBA catered for the Chinese market. Even the best MBA program in the world will not be able to teach you how to anticipate policy changes in China. The best MBA program can only teach you how to select the best options when the dirt hits the fan.
By the way, all legal documents that I have gone through are in Chinese. If your MBA was conducted in Chinese then that’s a major plus point in China. My $0.05 worth~
4. Chris Carr | May 25th, 2008 at 9:56 pm
WhiteDuskRed,
Thanks for the check in.
You make some very good business good points. I agree. Nice blog, by the way.
5. Mike | May 26th, 2008 at 8:54 pm
Hey Chris,
Long time no see. Are you still bringing your MBA students over to China this summer? I really think one of 2 things will happen. Beijing is completely full. All the hotels are crazy expensive and for good reason. or Beijing is somewhat full. The major hotels are booked but the rest are barren.
I’ve seen different indicators on both sides. Flights from the US was really expensive but has been going down in price due lack of demand (and new visa regulations). However, a lot of my Chinese friends have been really surprised I got tickets because they wanted them too! They suggested that I should scalp them.
6. Chris Carr | May 27th, 2008 at 9:04 am
Mike,
Good to hear from you. Glad to see you are blogging again, as you have much insight to offer from Shenzhen. Keep it up!
Yes, we again return to China this summer as part of our MBA trip. But no trip to Shenzhen this year, as we won’t have time — doing 8 days in India this year for our trip as well (and 8 days China).
Best,
Chris.
7. Nick Miura | June 2nd, 2008 at 2:41 pm
I find it a little ironic that the business schools that went to China with their executive program, tout their reputation in globalization and yet couldn’t survive themselves. Though the article makes clear that Chinese schools have MBA programs that rival western counterparts, I thought the point made that there was little demand for western MBAs at the prices charged was the key point in the article. It sounds like schools jumped on the China bandwagon hoping to get a part of the massive growth.
It makes me realize how important it is to have a strong strategy when entering China, with many contingency plans. Though China claims the largest global population, it sometimes seems Chinese markets can be relatively small. For instance, how many Chinese speak English, can afford to spend $40,000 on an MBA, and have the incentive to spend precious time doing so. It seems unrealistic to assume that you can build a business targeting such a small niche, especially if there intense competition (both from Chinese and other foreigners).
This also goes back to what Mr. Chillingsworth stated in his presentation - if you go into China looking for profits, make sure to have an exit strategy. All these B-Schools seemingly went to China thinking they would be embraced and have long term staying power.
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