Since the outbreak of the economic recession, China has become more active on the world’s economic stage. In comparison to the United States, it seems that there have been more opportunities for Chinese organizations to make big moves and become more competitive during the recession period. More and more Chinese enterprises are making overseas M&A( merger and acquisition) to gain global market share, especially in the economic downturn. However, the M&A activities in China are immature and full of risk, especially for those cross-border movements. Most of these activities ended in failure. One of the reasons causes the unsuccessful movements is related to the inappropriate attitudes held by the acquirer companies. The managers in the acquirer companies are too optimistic and expect the process to be simple. When facing the challenges after the acquisition, the managers are struggling for the immediate solutions. In addition, most Chinese companies are inexperienced with overseas brand marketing and completely rely on the acquired company’s outdated technology. They never think of what they could bring to and change the target companies except the money. They don’t anticipate that the loyal clients will have a crisis of the brand once it becomes Chinese-owned. As a result, the acquirers should enhance their management skills to make the correct evaluations on the M&A activities. The managers should learn both Chinese and western business practices and understand the existing and potential market thoroughly. Furthermore, the managers in the acquirer companies should improve the Chinese-owned brand awareness in the global market. It’s necessary to gain trust of the local customers and keep them satisfied. The last but not the least, the acquirer companies should learn the leading-technology from different leading companies and initiate their own innovations for the future businesses instead of relying on the acquired companies blindly.
Wednesday, February 10, 2010
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