Competitive Intelligence in Peacefully Rising China

1
Competitive Intelligence in Peacefully Rising
China
Qihao MIAO, September 29, 2005

• China and CI in Transition
• Intelligence Challenge
• Business opportunity

2
Question Is China an Intelligence Big Power

• YES James McGregor We're losing the intelligence
  war against China
• Washington Post, July 31, 2005 Page B01
• NO Our study found that the inadequacy of NCI
  seriously sustaining the development endeavor
• Research Project on National Competitive
  Intelligence, May 2005

3
Part One

• CI in Transition

4
The Ancient CI Tradition

• Know the enemy and know yourself in a hundred
  battles you will never be in peril
• Sun Tsu The Art of the War
• Tian Ji won a horse racing over the King, with
  worse horses but by good intelligence and game
  theory tactic

5
During Cool War 1950s-1980s

• From the 1950s to 1980s, scientific and technical
  information (STI) system was the only formal and
  well established techno-economic information
  service available in China

6
Competitive Technological Intelligence Functions

• Technology monitoring worldwide
• Contributing reverse engineering for foreign
  products and designs
• Supporting technology transfer, diffusion and
  assimilation
• Information analysis for strategic planning and
  policy-making

7
Challenge in the Coming of Market Competition

• The STI system is actually phasing out due to
  coming of market-oriented reform
• There is so far no alternative to the STI
  government sponsored nationwide
• Separated and individual CI efforts instead,
  spring up vigorously

8
The Case of Haier Refrigerator

• In the summer of 2002, Haiers refrigerator
  export to Turkey suffered from changed regulation
  
• Is it unfair competition as implied in the
  Chinese local media?
• My study of the case proved it actually a case of
  intelligence failure

9
dated 1.2.1996 No. 22541 bis. As the Regulation
and Communiqués are ammended every year, the
Regulation and Communiqués for the year 2002 have
been promulgated in the Turkish Official Gazette
dated 29.12.2001 No. 24625 bis.  According to the
Regulation of the above mentioned Regime,
10
Calls for a NCI System

• A country is a competitor
• There must be a nationwide competitive
  intelligence infrastructure
• For example, the trade early-warning system that
  help the single company in extensive business
  environment monitoring

11
The Structure of NCI
12
Part Two

• Current Status

13
Finding from a Recent Survey

• Conducted in June-September 2004
• Covered 418 companies and other organizations
  nationwide
• Interviewed with 28 experts

14
Do you have any CI activities
Yes
No
Response in Companies Surveyed
15
Size-dependant CI Awareness
Big Com 63.8
Average 31.1
Medium 28.5
Small 15.6
16
CI Market Share
5
10
10
55
20
17
CI Education
Bachelor 28
Doctor 16
Master 56
In 2004, 23 universities have CI programs
18
Market available CI Products
19
(No Transcript)
20
Case of Baosteel

• Baosteel is one of the two Chinese manufacturing
  companies that enlisted in the Fortune 500
• Business Intelligence plays a vital role in its
  marketing, MA, and overseas strategies

21
Strength of CI in Baosteel

• Organizational innovation integrating the
  business library, technical information and CI
  together as Baosteel Information Center
• Resources are cost-effectively distributed

22
Strength of CI in Baosteel

• Bought Qinghua Tongfang databases
• Search engine harvesting and managing the
  Internet information
• Intranet and mobile phone constitute 7/24 Alert
  System

23
Benchmarking

• Special department for major competitor
  benchmarking
• Each for one competitor
• Competitive/cooperative approach data exchange
  mechanism with competitors

24
(No Transcript)
25
Part Three

• Peacefully Rising

26
Challenges after WTO Entry

• The market-oriented reform in China has been
  accelerated firmly
• Global business competition landscape is much
  more complicated than managers have experienced
• New knowledge beyond price or technology war is
  seriously in short supply
• The complexity of industry analysis and
  application of ICT require highly professional
  service

27
Intellectual Property Unavoidable threshold

• During the Cool War time, Chinese successfully
  reverse-engineered many foreign technology, CI
  played an important role
• IP has been major targets of international
  conflicts
• Being a Responsible Stakeholder , CI requires
  new knowledge and expertise

28
Export Dilemma

• Export will face tougher situation, for example
• Stricter product standard raised cost, reduced
  profit margin, even cause trade conflict
• Social responsibility may be new round challenge
• Better intelligence, as well as indigenous
  innovation and invention may alleviate the tension

29
Know and Let Know

• China is a focus of attentiona new comer in the
  world mosaic is inevitably inviting panic
• A great challenge is let others understand and
  believe Chinas intension
• Towards a Co-petitive Intelligence

30
CNOOC s bid for Unocal

• Positive
• Competitive pricing
• CEO published an article in US media
• Hire an powerful lobby firm

• Negative
• Government background
• Target industries and regions that of others
• Anti-Chinese sentiment

China National Offshore Oil Corp.
31
Intelligence Dimension

• In lack of geo-political understanding of the
  global energy competition
• Hiring PR company right step but too late
• Underestimated the objection from Democratic
  party
• However, is the failure really a failure?

32
Part Four

• Business Opportunity

33
Requirements for Collaboration

• The problems we are facing are too big to solve
  by any single country, thus a cooperative
  partnership must be required
• Dr Javier Solana (Secretary-General of the
  Council of the European Union),Interview by 21st
  Century Business Harold, September 8, 2005

34
Overcome the Cultural Barriers

• The magic Guanxi
• Understanding Guanxi
• Negative grey areas for corruption and other
  illegal behavior
• Positive Tacit knowledge and human intelligence

35
Helping Going Overseas

• Growing FDI by Chinese Companies
• China is the fourth in FDI worldwide
• 2004 FDI Statistics of China, September 8, 2005
• The out-going Chinese desperately need expertise
  of foreign consultants

36
Big Market for Training

• In the knowledge-oriented society, life-long
  learning is a ever-growing market
• Chinas CI training market requires new momentum
• Training will bring other business opportunity

37
What for Training

• A recent survey found that there is strong
  training demand in
• Case studies
• Methodology
• International/Domestic new development
• Operation skills
• Software and other tools

38
Language Services

• French language two-edged sword
• In China young professional understand that
  French and other European language may be their
  next source of competitiveness
• In contract to English, there must be a big room
  for the language industry

39
World Expo 2010

• The 2010 World Expo in Shanghai must be a
  showcase of European business
• The early bird can get the better portion of
  food

40
Merci Beaucoup !

• qhmiao_at_libnet.sh.cn