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Three major paths for domestic enterprises to successfully "go global"

June 06 2019

With the implementation of the “going out” strategy, more and more Chinese companies are operating globally and opening up international maps in various ways.

If you want to go out better, companies should understand why they go out and how to go out?

Based on the relevant experience of overseas expansion of domestic private enterprises, Gu Chuan summed up the three successful paradigms of private enterprises going global.

First, rural encirclement

Take the lead in countries and regions with less difficulty. After the conditions are ripe and ready, they will gradually enter the developed countries and regions, and finally realize the occupation of the global market.

Typical, such as Huawei, decided to go out, Huawei talents found, looking at it, the fertile soil that can be seen, has long been left. In the end, only those areas with remote turmoil and poor natural environment gave Huawei a glimmer of life. Eventually they decided to establish a rural revolutionary base and encircle the city in rural areas. Deng Tao, who was responsible for opening up overseas markets, said, "In the first time in Africa, almost no one knows Huawei, and even does not know China. Everything starts from scratch." In the face of all doubts, Huawei has gradually grasped the key breakthroughs in key markets. From the point of line to the line, slowly develop its own market, find revolutionary base areas in the countryside, and rely on it to develop The national market is surrounded by layers to prepare for the final entry into the high-end market. The remaining fruits of "Asia, Africa and Latin America" eventually bloomed with gorgeous flowers.

Second, capacity resource layout

Considering the company's key production resources, technology research and development resources, and customer resources, the global R&D layout, production base layout, and marketing network layout will be used to achieve the highest comprehensive operational efficiency, optimal production capacity, lowest cost, and shortest lead time.

For example, Hailiang Group, according to the global copper product market demand, through the acquisition, mergers and acquisitions to form a global production and processing base. Hailiang Copper Processing Industry is committed to the R&D, production, sales and service of high-grade copper and copper products. It was listed on the Shenzhen Stock Exchange in 2008. Hailiang Copper Processing has become one of the largest R&D and production companies of copper tubes and copper rods in China. It is the largest copper tube export enterprise in China, the world's largest alloy copper tube manufacturer and an internationally renowned copper processing enterprise, with 188 countries around the world. Established long-term business relationships with more than 800 customers in the region.

Third, the thief first smashed the king

When it is about to enter a new field, it will directly gain industry leading position and high development quality by acquiring and controlling one of the two leading companies in the industry.

The acquisition of KUKA like Midea and the subsequent business integration are good examples. Midea's acquisition of KUKA is one of the most classic multinational acquisitions in a decade. KUKA has been the world's leading supplier of robotics and automated production equipment and solutions, and is one of the world's four largest robotics giants. On August 4, 2018, Midea purchased 81.04% of the shares of KUKA, and with the shares already held, it will eventually hold 94.55% of the shares already issued by KUKA, and it has absolute control. Midea emphasizes that the purpose of M&A is not to ultimately hold KUKA, but to develop a strategic partnership between the two parties, to jointly develop a huge robot market in China and Asia, and to maintain the independence of KUKA. Obviously, the acquisition of KUKA is more in the enterprise transformation consideration, the United States is not satisfied with the identity of a home appliance giant, intelligent manufacturing, industrial Internet of things is its future direction, such as the recent introduction to intelligent rice cooking robots, smart refrigerators, Intelligent medical rehabilitation robots, etc.

"Globalization expansion is a business that requires strategic vision, strategic patience, and strategic determination." Duan Lei, founder and CEO of Hanzhe Consulting Group, believes that considering the globalization of the company's own medium and long-term planning, it will get twice the result with half the effort. . First, the rural after the city, the first small and the big, the first business after the industry, should be a relatively stable strategic line in the expansion of globalization.