Submitted by: James McMillan

What do you think of when you see a Day’s in the US? Rows of doors facing a parking lot, basic rooms equipped with standard necessities, awful floral bedding facing an outdated TV, small front office lobby with an apathetic employee behind the counter, and a continental breakfast that you would rather pass on? So how could a hotel chain like this flourish in China? For one thing, it can’t be anything like what is described above.

Businessmen in China have learned that popular western hotel chains like Day’s Inn carry a certain nostalgia that is attractive to Chinese customers but in order to be successful, they must cater to the Chinese taste. That means the Day’s Inn really can’t resemble the western version in any way. At a Day’s Inn in China, you will find palatial lobbies with marble floors and walls, ornate crystal chandeliers, lavish guest rooms, and a complete breakfast menus. Check out this website that has pictures of a Day’s Inn in Shenzhen China. You’ll be amazed!

So why do Chinese customers gravitate to Western budget hotel chains like Day’s Inn when in fact they really don’t want to stay in a place that has the lackluster amenities that we see in these types of hotels? What is it about the Day’s Inn name that attracts them to these hotels and why aren’t they demanding the real deal?

I think Chinese customers really want to feel like they are experiencing American culture but are not necessarily always willing to completely venture out of their comfort zone.

What do you think?

Maybe the website with the full article will help enlighten you further.

Some of you have inquired about what you can do to learn some Mandarin before we leave and/or possible resources out there that you might check out. Please see the below excerpt in a recent email I received from one of our grads that took a proactive approach to this trip and experience, and hence scored a job out of it:

“Hi Chris,

Things are going really well for both Matt and I. We have both been working hard at work and are starting to get a good understanding of whats going on at our company. The management and co-workers seem to really enjoy us being here. I know that a lot of the girls/guys we work with have improved their English just from conversations with them and listening the Matt and I talk. We also teach and English class one a week to some of our co-workers.

I have started listening to a Pod Cast called ChinesePod.com. It is meant for foreigners to help them learn Mandarin. But they also talk a lot about the culture. It does a very good job at describing situations that students will encounter while in China and how they should react, plus with the added benefit of what they might hear people say to them. I think it would be very beneficial for the students going on the trip this year to listen to a couple of episodes, not only to learn some mandarin but the learn more about how to interact with locals while they are here. Listen to a couple of episodes and let me know what you think.

…. You should add in there the best way to get the pod casts is to get itunes, then go to the itunes store and type in a search for ChinesePod. They will be able to download all the new and old episodes. If anyone has every down loaded a Pod cast before it is very easy to do. I would recommend that they download all the past free episodes and listen to them. There is only a couple of hours worth and they will learn a lot.”

FYI: click HERE to check out Matt’s China experience blog.

A number of the good, attractive and ‘higher caliber’ and higher visibility trade shows in China often take place in October and April. In China, trade shows are a much, much more prominent marketing and promotion channel than in the US.

One of the drawbacks of the timing of our annual MBA trip to China/India 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.

One of our students from last year’s class and trip was able to leverage the trip and one of our firm visits into a post-graduation job at a Hong Kong owned company with factories in southern China (Shenzhen). Click HERE to check out and follow his journey from the blog he has started. Good job Matt! Keep us posted. (Matt did his MBA at the Orfalea College and his undergraduate degree at the University of Kansas and he is a rabid Jayhawk fan.) Follow his blog and posts. Encourage him. Learn from him and his experience.

Rock chalk … Jay-hawk … KU.

Shenzhen is one of my favorite cities in China. Some find it too overwhelming, new, crass and “sterile”. One reason I like the place is that some of the first friends I made in China live and do business in Shenzhen. I also like its business energy and entrepreneurialism — the wild west mentality of the place, even with its warts and all, fascinates me. The reason it is repulsive to some is the very reason I like to visit this place in southern China.

The NY Times just ran a nice article on Shenzhen, with photo feature. Click HERE for the article and HERE for the pics and short narrative. The students with an architecture background in our program will especially enjoy these pics and the discussion.

Due to the India addition to the trip, we unfortunately won’t have time to visit Shenzhen this year, but in my view, it is one of China’s faces that you should try to see sometime (sooner rather than later) in your business and travel career. Doing so will help you reach a deeper understanding of China.

The money quote in the video feature noted above is right on: Shenzhen is an echo of our own past. You look at it and see what the US did and could do in the 1920s and 1930s and post WWII when it pursued its own massive building of infrastructure and cities (things we can’t really do anymore for a plethora of reasons).

That is exactly one of the feelings I get each time I visit and experience Shenzhen.

For some informative blogs on what’s happening on the ground Shenzhen, see: Shenzhen Undercover and Shenzhen Fieldnotes

See also this related National Geographic pictorial on China’s Instant Cities.

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).

Submitted By: Simone Michel

South China was once known as the world’s factory floor. Plants used to spring up like mushrooms and seas of workers would wait in front of the gates in hope of being the lucky one to get a job. Lately, this picture has started to change. Many of the big gates remain closed due to rising costs and shifts in Chinese government policy, knocking hundreds of smaller factories out of business. Some of the factories that are still in Guangdong province, watching how their profit margins disappear, are considering moving to lower-cost countries such as Vietnam. According to this 1,000 shoe factories closed in 2007.

Many reasons come together: Companies are losing money because of the rising value of China’s currency, making it more expensive compared to the US Dollar. Furthermore, raw material prices ballooned and not the full percentage of this price increase could be passed on to customers. Tax shields for foreign companies were abolished. Inflation returned to China last year as well, letting cost of labor rise faster than productivity. As a rule of thumb, foreign managers in Shanghai have to raise wages by 10 percent every year, otherwise their employees give notice.

But rising cost is not the only reason factories have gone bankrupt. On one hand, workers can now find more jobs elsewhere than ever before and South China is experiencing a labor shortage. Furthermore, the workers that can be found are unskilled. On the other hand, China’s government is making it harder on these factories. After encouraging cheap manufacturing for more than a decade, the regime wants to push investment toward high-tech. The goal is to have more sophisticated factories with higher-wage jobs. China is following Japan and Taiwan, countries who have both started out at the low-end and climbed up the manufacturing ladder to the high-tech end.

Furthermore, the government changed labor policies at the beginning of this year. Chinese workers are starting to get aware of the working conditions and are now demanding higher wages, overtime pay and improved safety. The second broadcast of NPR’s China series highlights nicely how the new law is requiring businesses to give workers written contracts and pay compensation if they’re fired.

With more and more workers pressing their rights against their employers, a supplier’s market of labor and rising costs, the factories are forced to come up with new ideas. Do you think the factories in Guangdong province have to shut down because of all these external influences or do you think it’s their own responsibility because the concept of lean production has never played a role in China’s past?

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…

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 ….

I was recently contacted by Christine Lu of the China Business Network re: our MBA trip to China, our MBA program, and our MS in Industrial Technology (IT) program.

Click HERE to listen to the radio interview (5 minutes) re: our annual China trip.

Click HERE to listen to the podcast (20 minutes) about our MBA and MS in IT program.

For the record, the latter 20 minute podcast is a textbook case of how an interviewee (me) can muddle up an interview.

In my enthusiasm for what we seek to accomplish and are doing at Cal Poly I talked waaaaay too much, should have let her talk more, should have let the dialogue naturally flow. Drs. Whitaker and Beamon, who teach your Communication for Mangers course, would rightfully and justifiably take me to task for this blabbing. I would rate my own performance a “D”, at best. I am clearly rusty at giving interviews.

Listen … and learn … how not to do it. Christine Lu was very good and a gracious interviewer. I was not a very good interviewee this go-around.

My main point for this self-criticism is to actually make and educational point: More and more the soft skills are becoming the hard skills in business. 

It can be tough for some students and professionals to swallow that something without a formula, something so subjective as communication, can really knock them on their behinds.

My secondary point is that these skills can easily atrophy. They need to be nurtured and developed and refreshed throughout your career — a one time MBA class dealing with communication issues only means you are on your way, not that you are set for life in this important area of business. Don’t assume that just because you made it through your MBA communication course that you can now run back to the back room of your firm and you never have to speak or write in front of people again.

Don’t believe it? Then click HERE and HERE for these recent Wall Street Journal articles [subscription may be required] on this topic.

Ms. Lu has such an interesting background — as I understand it she moved to the US from Taiwan with her family when she was very young, grew up in the Los Angeles area in a Latino neighborhood, did her undergrad at Boston University, spent 4 or 5 years in Shanghai working with/for the Home Shopping Network seeking to make inroads into the Chinese market, and she is now back living in the San Diego area.

I have been perusing her blog. It’s great. I wish I had 1/100th of her web and technology skills. It is a wealth of information and resources. Check it out.