Posts filed under ' Shanghai'
Day 7 – Suzhou to Shanghai
We arrived in Suzhou by train at 6:30 AM and promptly packed our things into our bags, clearing out of the sleeper cars. The walk through the train station was quite a challenge as we maneuvered up and down sets of stairs. We met our new bus driver and headed out to the Lotus Gardens. Suzhou is known as the Venice of the East due to its numerous canals and while the many waterways do add to the uniqueness of the city, the real beauty lies in Suzhou’s gardens. We walked through the gardens for an hour and then met to take a boat ride along the canals. What we thought was going to be a tour of the canals ended up being a 100 yard journey, but luckily the driver sang for us so we didn’t feel cheated out of our money. The short boat ride gave us extra time to spend before we needed to be at our firm visit, so we stopped and walked through a local farmer’s market. The sights and smells were enough to overwhelm many in the group. Live chickens, ducks, fish, crawdads, and frogs were all throughout the meat section. Vegetables and spices of all kinds could also be found throughout each of the many isles of the market. We were greeted by surprised but welcoming faces from each of the vendors and we often heard “hello” or “how are you”. There was a little bakery that sold muffins which ended up being breakfast for the entire group as we got back on the bus to head to the Suzhou Industrial Park.
Our first firm visit was to the China-Singapore Suzhou Industrial Park. The Industrial Park is huge development with 74 Fortune 500 companies, over 100 R&D organizations, commercial and residential space and much more. Our host gave a presentation that detailed the history of the park and the plans for future developments. He discussed two important economic areas, the Coastal Economic Belt and the Yangtze River Economic Delta, which conveniently intersect near the park. Our host’s specialty is working with companies to get through what can be a very challenging regulatory environment in China, so his insight was quite valuable. After listening to his presentation and the discussion afterwards, it was clear that China is still interested in high growth. But this growth is no longer at any cost since there are now strict environmental regulations to be able to develop in the Suzhou Industrial Park. After a group picture with our host, we were on our way to our next firm visit, a short bus ride away.
Our next stop was Hip Fung Electronics, an electronics manufacturing service. We were lucky enough to know top management at Hip Fung from a family connection in our MBA class. They organized a wonderful visit which included a presentation, fed us lunch, and provided us a tour of the factory. The presentation detailed the history of the company and which actions have helped to increase Hip Fung’s success. It was interesting to note that once Hip Fung switched to a high mix low volume strategy, they became much more successful. We took this as another example of why lean manufacturing is so important and will only continue to become more popular. The lunch we ate was the same meal that factory workers are served each day and it was quite delicious. After a banana for dessert and the brightest lime anti-static outfits ever, we entered the factory for a tour. One of the first things we noticed was the absence of men on the assembly line floor. Women’s smaller and more nimble hands allow them to be superior at the intricate tasks required for electronics assembly. The factory was clean, organized, and appeared to have great working conditions. A few people in our group were allowed to go see the dormitories where the factory workers live. While the building was minimalist and workers slept six to a room on thin padded wood frames, the general sentiment was that the living conditions were better than expected and were very clean and well kept.
The next factory we visited was Positec, a manufacturer of machine tools and the popular Worx line. We toured both the showroom and factory and were impressed by the massive injection molding systems used to make their products. We left Positec to go visit Plantronics where we watched a presentation about the unique culture of the firm and then toured the factory. The factory had a similar look and feel to that of Hip Fung but on a larger scale and was a LEED certified campus. Plantronics had their complete service chain located in-house and maintained a strong focus on employee total well-being.
After our final visit of the day at Plantronics, we headed to the nearby McDonald’s for people to get food and bring on the bus so that we could arrive at a decent hour in Shanghai. Barely into our journey, the traffic on the freeway stopped completely. The bus driver thought it was better to avoid the traffic so he turned around in the middle of the freeway and drove off the on-ramp. After a few games of “chicken” where our bus ultimately won, we were back on a different road heading to Shanghai. We often hear Chinese people described as adaptive and flexible. This was first hand experience of that phenomenon.
Today provided our first look into the highly-used reference of China as the “factory of the world.” It was quite impressive to see the various scales and technical capacities that the companies operate at. We watched the nimble hands on the production line assemble products that will be on the shelves of retail stores when we return—and it provided that connection in the product life-cycle between production and consumption. While this might not have been a representative sample of the manufacturing facilities in China, the company visits reinforced the idea that this is good for the people. The workers work and live comfortably, and retain an image of pride and happiness.
June 18th, 2008
Daybreak
This morning found us ensconced in our rooms at the Jian Gong Jin Jiang Hotel enjoying a late morning to help recuperate from the busy day prior. The breakfast here is more traditional Chinese fare with dim sum, rice, and chicken included in your am options. With ample time to explore the city, groups of students fanned out to learn more about Shanghai.
Free Time
The nearest subway station is the Hengshan Road station. Some members of our team ventured across town to a market similar to the Silk Street Market in Beijing. Many of the negotiating tactics used by the merchants at the Silk Market were in evidence here, but some new tactics were also observed. Some watch and purse sellers would invite you to a “secret” room located behind their shop where you were lead to believe that better goods were available. Another common tactic here was to offer two different qualities of the same product (poor and best). This attempt to match products with customer desires, and pocket books is representative of the overtly capitalistic tendencies of Chinese business.
In China, everything is negotiable. A price may change from minute to minute, day to day, or from one sentence to the next. Some students observed situations where the price on water went up after other students who arrived earlier lowered the vendor’s supply of water. In other cases, prices dropped dramatically when the customer walked away from a sale. Buying cheap, fake goods may not sound like much of a business lesson, but negotiating in Chinese markets is invaluable experience for American’s like ourselves who have little experience in negotiating price.
Many students also found their way to the Shanghai Urban Planning Exhibition Center. For the Architecture undergrads, this was a chance to peer, and point, and photograph the largest urban planning model in the world (over 600sqm). If you’ve ever seen the “Archies” out on Dexter Lawn at Cal Poly with their models, this is a bit like that, but on an absurd scale. In China, even the models of things are big.
Shanghai Live Market
To contrast the difference in food between tier 1 and tier 2 cities, our first group stop this day was at a live market near the hotel in Shanghai. This market was similar to the one visited in Suzhou, but exhibited a higher standard of cleanliness. The floors were not clean, but they were not awash in effluence as we saw in Suzhou. The smells were strong, but not overwhelming. As always, the storekeepers were friendly - smiling and perhaps amused at our cameras. It’s easy to look at these markets and think “gross” but the food is undeniably fresh. It’s not what we are used to, but you could assemble a very nice dinner from the items available at these markets.
Yuyan Garden/Temple
Our second group stop of the day was at the Yuyan Garden/Temple, located on the outside bend of the Huangpu River adjacent the famous Bund. The road to the Temple was a gauntlet of street merchants. The sheer numbers of people selling goods with the smallest of values is hard to understand, but is important to remember that China the supply of people ready and able to work is high. So where the smallest of demands for human labor exist, it would seem that workers are ready to meet it. A hotel will have people endlessly sweeping the floors and wiping the windows. A park will have security guards standing under umbrellas in what seems like unreasonable numbers, and here at the bund there are hundreds of people working the streets to make a few Yuan. What we would perceive as a glut of labor is not a glut here. Supply and demand.
The temple was similar to the gardens in Suzhou. Traditional buildings, rock work, and lions standing guard at the entrances. The Xianmingju Teahouse was devoted to the drinking of tea, and the benefits of doing so. Mark at the Hutong in Beijing discussed the importance of tea drinking in Chinese culture, and the temple helped demonstrate the longevity of the tradition. In all honesty however, the purpose of the Temple seemed to be commercial. There were thousands of people in the surrounding shops and markets, but few willing to spend a few RMB to visit the historical site.
The Bund
We traveled a short mile or so down the road to a drop off adjacent the Huangpu river for photos and to forage for dinner. Dr. Carr discussed the history of the area, the details of the French Concession (and hence the French architecture here) and the fact that communism was founded in Shanghai. Chinese flags snapped in the breeze over every building here.
The view here is a stunner, and our collective cameras fired with enthusiasm. Under the splendor of these magnificent buildings, the river sulked and rolled in a polluted broth. Many views are contrasting in China and this was no exception. Splendor mixed with squalor. Shine mixed with smudges. Look up and you see some of the most amazing buildings in the world. Look down and you see a price that was paid. The Bund is an amazing place, but it was sad to see the river flowing past.
On past the waterfront we broke off in to smaller groups and found something to eat. Some of us headed to the 47th floor of the Radisson to the Sky Dome Bar. A Tsing Tao will run you about $9 U.S. here. Yet another example of how location and timing influences price. LED lighting is widely used on the skyscrapers here and it presents an amazing effect at night. Perhaps this architectural trend will become more prevalent in the U.S. when some of our architecture undergrads get back from this trip. We hoofed it back to the bus by 9pm.
There’s Your Sign
In marketing, we talk about doing business overseas and making sure to avoid cultural snafus. Kaiser Kuo drove this lesson home when he lectured us in Beijing about the speed with which a brand can be trampled online in China if it is perceived in a negative way. On the flip side, we observed some truly amusing signs (in English) here that bear mentioning. Consider the following:
A business advertises in large letters above it’s store “Keep Moving”
A restaurant hangs a sign that says “The World Famous Home of the Famous”
A wig shop advertises “The real hair false hair specializes in selling”
A t-shirt reads “You, Ms Lee you you how much un”
We chuckle, but there is a lesson here. If you are trying to make money selling to a language that you do not speak - check your grammar. Then check it again. Now pause, before you print your ad and check it one more time just to be sure. We have no doubt that equally embarrassing mistakes are made every day by U.S. companies trying to get their slice of the China pie.
After Hours
There are small details during a life on the road that make all the difference. Several of us walked across the street from the hotel to the Jin Chen barber shop for a haircut or a shampoo. For about $7 U.S. you can get a head massage and shampoo, haircut, and rinse. It’s a 45 minute process. The folks here are pros, and the haircut may help you in your efforts to “go native” with a Chinese doo. Mr. King is the manager, and he has no qualms about staying open an extra half hour to get you taken care of. Hot weather in India is coming soon and we will be working there with cooler heads now.
June 18th, 2008
Today was a day of industry and fun for all of the members of our trip. The day started early, far earlier than any other day we had had, 7:45 am. Reason being, we wanted to make sure our arrival time stayed on track and was not delayed by traffic on our way to Shanghai Portola Packaging Company. Sure enough, we did not hit one bit of traffic and we arrived to Portola ahead of schedule. This turned out to be a blessing in disguise because it enabled us to meet and spend ample time with the Managing Director of Portola Asia and discuss the packaging industry.
The Q and A session that was held was both informational and most enjoyable for all the students. Who knew the packaging industry in China was so much different from the packaging industry in America, not so much factory wise but more infrastructure? Portola’s Managing Director was both informative and impressive in his background. The man knows 20 languages, speaking 7 of them fluently. This shows the importance of understanding other cultures and embracing other countries and their customs. The factory tour itself was also very exciting. Being able to see how Portola utilized injection molders, compression molders and assembly was interesting. The warehouse, that was primarily Just-In-Time (JIT), was also interesting to see from a packaging perspective. One of the most interesting things was how the corrugated shippers used were different from those used in America. Instead of using a B and C flute double wall container, they were using a C and A flute double wall container. That is just one example of the different practices used in China. We thank Portola and their representatives for their time.
Following a final Q and A with the Managing Director, we made our way to the Yangshan Deepwater Port, just off the coast of China. The drive out to the port was long, which enabled most students to catch up on sleep on the bus ride. The suspense leading up to the port became more apparent once we made it to Donhai Bridge, the second longest bridge in the world. The bridge itself is 21 miles long and spans for as far as the eye can see. At the end of the bridge was the Deepwater port which was impressive in its own right. All of the port was built from the ocean up and contains 25,386 container slots, with 18 container gantry cranes to move the containers from the port to the ships. What was interesting was that this port holds the record for the most containers moved in an hour, 120. Following our Q and A session with the port representative, that was translated by the great Gary Chow, we made our way up to the exhibition room that contained a model of the entire port. It seems apparent at this point that the Chinese enjoy models for displaying the structures and areas that they are proud of. This is the second model that we have seen on our tours, with a third being at the regional planning museum in Shanghai. The model was informative and really put the idea of the port system into perspective. We thank the Yanghshan Deepwater Port for its time.
The final event of the evening was our fair well dinner at Yakshi! We were provided with dinner and entertainment throughout the evening, both dancing and singing, with many members of our MBA/ITS team joining in on the fun. Following dinner was a trip to a top end nightclub, where Dr. Carr’s friend Alex kindly hosted us for an evening of dancing and clubbing that could only be brought to us from the city of Shanghai. While there we me additional interesting and successful expats and locals to build our social and professional networks. I could not imagine a better way to spend our last evening in Shanghai and in China. Alex was very kind to do this. Thank you Alex!
Tomorrow it’s off to our final company visit in China, and then tomorrow night we fly to India!!
June 18th, 2008
“Stranded …”Friday, June 27 … How to begin?
We opened a rainy day in Shanghai with a visit to a local Subway store. The visit was led by their operations manager for the Subway stores in Shanghai and the surrounding province. He was incredibly personable and accommodating, and he took us on a tour of three other nearby Subway stores. As part of their localization strategy, Subways in China have a lobster-salad sandwich, in addition to the classic menu from home, which is surprisingly delicious! An interesting business point he highlighted is Subway’s ability to locate multiple stores within close proximity without cannibalizing sales from each other. This is due to the different market segments that each store targets. While one of the stores located at a major Shanghai landmark is geared mainly to tourists, the nearby shopping center store targets more local shoppers. Another nearby Subway store caters almost exclusively to daily office workers. This was an excellent and informative visit. It also made a number of strategy, legal, marketing, operations, HR and leadership issues we studied in our various courses come to life. A big shout out from Asia to our Cal Poly alumni (you know who you are!), for helping set up this visit for us and for all you do for the college and its students. We really appreciate your time and support. This was a fantastic visit and learning experience.
After leaving Subway we were dropped off at the Shanghai Maglev train – a commuter railway which is actually the world’s fastest train. The train levitates on electromagnets, and reached a top speed of four hundred thirty-two kilometers per hour while we were riding it. The sole purpose of the train is to provide rapid transit between the Pudong district and the Shanghai International Airport. The conventional one hour car ride is accomplished in only fifteen minutes on the Maglev. Through this ride and experience, we caught a glimpse of China’s future infrastructure plans, as we were advised it plans to build similar lines along its eastern seaboard.
Once we got to the airport the fun really started. An international business trip wouldn’t really be complete without a world-class travel debacle, and this one was a doozy. First, we discovered that our Shanghai-Hong Kong flight was drastically delayed due to the typhoon near Hong Kong, and thus would undoubtedly miss our connecting flight to Delhi. After eleven of us checked our baggage in to the airlines, Cathay called an “emergency staff meeting,” suspending all baggage check until 8:00 pm. The eleven of us that did have our baggage checked had already passed through customs, and were enjoying a leisurely meal in the airport food court, and had no idea that the rest of our group was stuck back at the baggage check area. After a couple hours and multiple indecipherable airport pages from the rest of the group we made contact via instant message on someone’s laptop. We were then escorted backwards through customs in order to reconvene with the rest of the group, earning us a rare “canceled” stamp on our China visa. Once back at the check in area we waited for baggage check to reopen and were reissued boarding passes, as our first ones had been voided. Then we re-entered Customs and security, and eventually boarded the aircraft about five hours behind schedule. We did not arrive in Hong Kong until 2:30 am.
Upon arrival in Hong Kong the leaders and translating students spent about three to four hours diligently working with the airline to try and get our group on to the next flight to Delhi. The problem was there were almost no flights departing for Delhi for the next two days and the airline would only be able to guarantee seats for twenty out of the forty-six people in our group. The remaining people would have to fly standby with no guarantee that they would get a seat. Many of us slept (or tried to sleep) on the ground near the check in counter. As the airport geared up for the morning, the twenty randomly selected people who were guaranteed seats left for the gate, while the rest of us hung out in the food court, dreading the coming day of standby status. Minutes before the flight was scheduled to leave, we were greeted by the good news that twenty-one more of us had found seats on the morning flight. However this meant that five people would be left behind to wait for a later flight departing that night.
The forty-one of us that did get on the flight gratefully touched down in Delhi at around 3:00 pm on Saturday, twenty-five hours after arriving at the Shanghai Airport. As we staggered out through Indian customs, many of us spotted our luggage on the nearby carousel. As the minutes ticked on, however, the students who had been deemed standby began nervously shifting our weight. As the last pieces of luggage arrived on the carousel, our fears were confirmed. All standby students had lost our luggage. We proceeded to a counter where we filed a complaint form, which was then hand copied and recopied by the local authorities. We then met our Indian hosts, and were finally brought to our Indian Hotel, where we were able to take a very welcome but cold shower.
This past day served as a wake up call to a facet of doing global business that can be a real challenge — airport and travel delays. It clearly takes the right type of person and employee to be able to hang with these types of travel bumps and challenges.
June 18th, 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.”
May 19th, 2008
A hat tip to Gary Chou for sending me the below link. I am a National Geographic subscriber, remember the below issue coming out and reading it, but I forgot to put up a post and the issue had since disappeared into the mess on my office desk at home.
Click HERE to check out these great pics on China’s Instant Cities (the photo gallery link is on the right side of the page; the commentary by Peter Hessler is top notch, as is all of his work - e.g., Two Years on the Yangtze). And reading this very good Wall Street Journal article, On the Move: Chinese Officials Want More Farmers to Migrate to the City; But They Are Also Aware That Migration Brings Problems, will put these photos into a good big picture context for you.
Finally, last month, April 2008, National Geographic published a special issue only on China called, China: Inside the Dragon. Check it out. Again, some great short pieces by Peter Hessler and the usual amazing pictures. You can also click HERE to listen to the China Business Network’s recent podcast interview of the Editor-in-Chief of National Geographic Magazine, Chris Johns, about this issue on China. I also had no idea National Geographic is read by 40 to 45 million people each month. Cha-ching. And talk about a company that has put on a clinic for others re: how to manage and build its brand ….
Enjoy.
Prof. Carr June 13, 2008 addendum: see also this related post on instant city Shenzhen I just made (Shenzhen is located in southern China).
May 18th, 2008
Nope. Not Shawn Kemp, the NBA player with loads of talent but not much production (that’s being kind).
This “reign man” is Shaun Rein, an up and comer in the US and China business circles. Check out this recent 6 minute video interview of Mr. Rein by Christine Liu of the Chinese Business Network. I have read some of his work, reports and seen other interviews and blog discussions about him. This is a smart business dude - also served as a teaching fellow at Harvard; did his undergrad work at McGill University in Montreal (good school; sorry OCOB MBA ethics team, not trying to put salt in the wound by saying the word “McGill” as in my view you got the short end of the stick that favored McGill on the time clock thing at your recent competition — chalk it up to a real world experience and an advance start for the “life ain’t fair” vicissitudes).
Continue to monitor Mr. Rein (a real reign man) and his career. He is young and I predict he is going to make it really, really, really big.
May 16th, 2008
Submitted By: Naomi Guy
The air is hot, sticky, and dirty. Your throat becomes itchy and a bad taste arises. What do you do? Well, in China you better not spit. Renmin University in China has created a Civic Index to measure the “civility” of their cities and gauge progress as the Olympics draw near. The index analyzes behaviors such as spitting, littering, and line forming from over a quarter million observations and surveys. According to this article, Beijing has been decreasing this behavior, but not as drastically as required before the Olympics. In 2007, Beijing scored 73.4 points, up from 69.06 in 2006 and 65.21 in 2005, but not up to the 80 point target. Changes were brought about using both positive and negative reinforcements ranging from flowers to fines. An example of an interesting (yet somewhat derogatory) program is one to promote the peaceful forming of lines. On the 11th of each month (standing for 1 after 1), uniformed officials swarm upon bus stops and subway stations waving flags at everyone to ensure they line up. The program was created by Zhang Huiguang, director of Beijing’s Capital Ethics Development Office. She is now better known as “Ms. Manners”, and claims that changing these bad habits before the Olympics is “crucial in providing a cultural and historical legacy to China and the world as a whole”.
So what’s the big deal? It seems obvious that any country would want to look as good as possible for the hundreds of thousands of tourists expected for the Olympics. Well, we all remember back a few short years ago when SARS was a major health threat. During that time, officials tried to stop spitting in public to help stop the spread of the disease. Sadly, more effort has been directed into putting on a clean image for the Olympics than protecting the health of the country, and the world, just three short years ago (article). A fairly drastic change in behavior has occurred in the past year to create a new image, three years ago, when lives were at stake, it was hardly a difference.
So why is this? Did the government not care as much about health, or were people too stubborn to believe the threat of SARS? Is an external image more important than internal wellbeing? Would you expect this behavior to be true outside of China? Do you agree with Ms. Manners that these changes are crucial to providing a legacy?
I’d like to leave you with this statement by, Zhang Faqiang, vice chairman of the China Olympic Committee, “Ultimately, China’s modernization rests on the quality of its citizens.” Do manners truly make a quality citizen? and can that lead to modernization? I’ve know some key American inventors with little to zero etiquette…
February 26th, 2008
A hat tip to Dan Harris and the China Law Blog for this lead ….
Here is a really, really interesting power point presentation by advertising giant Ogilvy on consumers in China’s Tier II and III cities. Some great stuff in here that will relate to what you are studying or will study in your MBA marketing class this winter quarter (e.g., branding, market segmentation, packaging, impulse buying, distribution channels, price sensitivity, who makes the family buying decisions, etc. anyone?). This material also highlights why so many foreign firms are trying to get into the market there — the consumer class and their spending power in these lower tier cities are on the upswing. This presentation is worth spending a few minutes to click through and study. Doing so, via this compare and contrast measure, also helped me better understand the marketing of products here in the US. Once in China, as you walk in and out of stores, and as you bus from A to B and look out the window, you need to think back to this material and connect some of the dots as related to your coursework ….
February 6th, 2008
Thanks to Christine Lu of the China Business Network for this lead.
A number of the good, attractive and ‘higher caliber’ and higher visibility trade shows in China often take place in October and April.
One of the drawbacks of the timing of our annual MBA trip to China is that it takes place in June/July. Hey, we can’t see and do it all; yet perhaps this year we will get lucky while in the Shanghai area and be able to see one (but I can’t guarantee it as I don’t get to determine when decent trade shows do/do not take place in the Shanghai area!).
When that day comes when you have the opportunity to attend a trade show in Asia, you MUST grab that opportunity, and the following articles are must watches and reads:
YouTube Video on China Sourcing Fair
For a nice searchable examples for worldwide trade shows, click on Global Sources and Global Sources Trade Show Center
Five Tips for Getting the Most out of Exhibiting at Trade Shows
Visiting a China Trade Show
Getting the Most out of a Trade Show Visit in Asia
Selecting the Right Trade Show for Your Needs
What Happens After Your Trade Show Visit?
This video and these articles made me want to go into sales … almost.
October 17th, 2007
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