A book worthy of every Chinese entrepreneurs' attention
A departure from my routine, this time I introduced a Chinese book, a business book by our populist economist Prof. Larry Lang. Prof. Lang first came to public limelight with his show “Larry Lang Live” on CBN. After running for two years, the popular programme was brought to an abrupt end in 2006, with the last few programmes unearthing severe irregularities with the use of Shanghai’s social security fund. Half a year later, top Shanghai government officials were investigated and later convicted of wrong-doings. The contribution of Prof. Lang to enlighten the public with complex economic and financial issues and his genuine concern for the well-being of the Chinese economy and businesses have earned him great prestige among the Chinese public.
In The Nature of Business book series, Prof. Lang offers laymen as well as professional readers the first business case studies focusing on Chinese businesses. In the Preface, Lang revealed that the competitiveness of Chinese businesses had fallen unexpectedly in the last 10 years, from the level equivalent to Philippines, Brazil, or Greece to that of Czech, Hungry, Poland and Thailand. He explained the major four challenges facing Chinese businesses and entrepreneurs today: 1. Vicious competition, often leading to price wars, as a result of simple replication of successful business models, with further complication from unspoken rules, corruption, bribery and lack of rule of law; 2. Foreign investment, which can run their Chinese operations at a loss with funding from abroad, crushing local business by waging a price war and suffocating suppliers by withholding payment and charging excessive fees. Often enjoying a great deal of tax breaks from local governments, foreign investment actually has questionable record of bringing technology transfer to China and reinvesting huge profits it earned within China, not to mention that locals benefit not that much as the salary is not necessarily much higher than from local businesses. 3. High risk as in there many reasons to fail but only one course to success. 4. The nature of business of which the majority of Chinese entrepreneurs have little idea, thus losing in competition with foreign companies and brands.
In the book series, Prof. Lang tries to address the fourth challenge, that is, what is the nature of business, through case analysis of successful and failed businesses. In book 1, he explored three sectors: sportswear, coffee shop, and cosmetics. The most striking business case is that of Li Ning, how a native brand with a market share of almost 70% in late 90s losing out to foreign rivals and now taking less than 10% market share. The essential message from all cases, regardless of the different sectors, is that a brand must establish an image with which customers identify themselves, that can create a bond between the brand and its customers.
Prof. Xie expressed reservations: it is actually more complex than what is said in the book. I am not qualified to judge this. So what do you think? You are welcome to share your views on our Douban website.
This book was discussed in the book-crossing activity in Hongqiao International Library. To know more, please visit our home page: http://www.douban.com/people/50946105/
In The Nature of Business book series, Prof. Lang offers laymen as well as professional readers the first business case studies focusing on Chinese businesses. In the Preface, Lang revealed that the competitiveness of Chinese businesses had fallen unexpectedly in the last 10 years, from the level equivalent to Philippines, Brazil, or Greece to that of Czech, Hungry, Poland and Thailand. He explained the major four challenges facing Chinese businesses and entrepreneurs today: 1. Vicious competition, often leading to price wars, as a result of simple replication of successful business models, with further complication from unspoken rules, corruption, bribery and lack of rule of law; 2. Foreign investment, which can run their Chinese operations at a loss with funding from abroad, crushing local business by waging a price war and suffocating suppliers by withholding payment and charging excessive fees. Often enjoying a great deal of tax breaks from local governments, foreign investment actually has questionable record of bringing technology transfer to China and reinvesting huge profits it earned within China, not to mention that locals benefit not that much as the salary is not necessarily much higher than from local businesses. 3. High risk as in there many reasons to fail but only one course to success. 4. The nature of business of which the majority of Chinese entrepreneurs have little idea, thus losing in competition with foreign companies and brands.
In the book series, Prof. Lang tries to address the fourth challenge, that is, what is the nature of business, through case analysis of successful and failed businesses. In book 1, he explored three sectors: sportswear, coffee shop, and cosmetics. The most striking business case is that of Li Ning, how a native brand with a market share of almost 70% in late 90s losing out to foreign rivals and now taking less than 10% market share. The essential message from all cases, regardless of the different sectors, is that a brand must establish an image with which customers identify themselves, that can create a bond between the brand and its customers.
Prof. Xie expressed reservations: it is actually more complex than what is said in the book. I am not qualified to judge this. So what do you think? You are welcome to share your views on our Douban website.
This book was discussed in the book-crossing activity in Hongqiao International Library. To know more, please visit our home page: http://www.douban.com/people/50946105/
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