In ‘Going Global’ the series focuses on what it takes for small and mid-sized businesses to leap into new markets, achieve global reach, and potentially improve current business processes and outcomes by extending beyond domestic boundaries for both scale and expertise.  

Bird's Nest Stadium, China, [photo by Andrey Belenko.]

In recent weeks I’ve had a chance to speak with Professor Jihong Sanderson, UC Berkeley Haas School of Business Lecturer and Professor for seven years teaching the graduate course “Management of Technology, Doing Business in China”.  Sanderson was UC Berkeley’s Executive Director, of the Center for Research on Chinese & American Strategic Cooperation from 2005 – 2008, a leading think tank devoted to enhancing the cooperation between China and the US through exchanges, research and educational programs.

In addition to founding Berkeley Consulting Associates in 2003, her global strategic consulting company devoted to helping MNCs and foreign investors initiate and optimize their businesses in China at the global level, Sanderson has been invited to provide advice to top Chinese policy makers and state-owned enterprise leaders on the subjects of global strategy, innovation, and intellectual property.  Not least of all, she was awarded the top “2009 Innovative China Brand Woman”.

Q: You’ve written extensively on “Doing Business in China”, What is your approach and how can global small and midsized companies apply this knowledge to break-in or start doing business in China?

A: For the past two decades and for perhaps the next generation to come, China is where the growth is located, so China is where the opportunities are to be found. So while going to China involves learning a new approach to business, it is really not optional. Preparing to enter China involves three main tasks: 1) becoming much better at what you do - what I call improving your business DNA, 2) integrating much better into Global and Chinese business ecosystems, and 3) generating the knowledge assets (mainly know-how) that allow your company a high level of function in China. (These three tasks correspond to the three factors of value creation in the knowledge economy, namely business process, collaboration, and knowledge.)  The firm that is successful in China will find ways to build these three assets at the lowest possible cost, in the shortest possible time, and with the largest degree of corporate learning.

Q: What advice do you have for small and mid-sized businesses looking to become more globally competitive?

A: You really need an "unfair advantage". Playing the game as it is presented to you by the dominant firms in the global markets is a sure road to mediocrity and failure. You must somehow change that game. We have identified nine main strategic situations that will allow a small or medium sized company to overturn the dinosaurs of their industry. The first phase is to take your company resources, capabilities, and decision making to the next level  -  that business DNA again.  Next is to become more aware the strategic level of the business game, recognizing opportunities to build the "unfair advantage." 

Q: What changes will we see in 2011 as China’s own SMEs begin to emerge more prominently ?

A: For years China's business demographics have paralleled its population income demographic - tens of millions of micro-entrepreneurs operating in the shadow of giant state-related industries. Now, both in population income and in business, a middle class is asserting its strength, even as it grows explosively in numbers. If the policy makers achieve their goal, these "middle class" SMEs will drive domestic consumption, job creation, domestic innovation, and GDP growth. And in China, the policy makers are VERY good at achieving goals. We will likely see less irrational "policy lending" to the inefficient giant companies, better access to credit and the other resources of society for SME's,  and a "new wind" of change throughout China's economy as these very capable, very intelligent, and very determined entrepreneurs occupy a more central place in the world's most dynamic economy. And, most significantly, they are sincerely inviting your global company to join them.

Thank you, Professor Sanderson for those insightful observations and direct experience with which companies can execute global strategies.  I’d be thrilled to hear of any readers and small and midsized businesses which have exemplified ‘Global Global’ in either new market reach, areas of manufacturing or distribution, or in other ways.