BIZCHINA> Review & Analysis
|
BIZCHINA> Review & Analysis
|
|
Fitting 皇冠体育app into your global footprint
(chinadaily.com.cn)
Updated: 2008-05-23 15:20 皇冠体育app is increasingly attracting other business activities than low-cost manufacturing. Conducting state-of-the-art R&D and producing latest-generation products in 皇冠体育app is the next big thing. As the mix of business activities conducted in 皇冠体育app becomes more complex, deciding which products or technologies have the best fit for development or production there becomes equally complicated. Global business executives need an effective decision logic for fitting 皇冠体育app into their global manufacturing and R&D footprint. The logic should start from competencies ("what capabilities should we master?") rather than products ("what components should we have?"). This avoids the common mistake of looking at 皇冠体育app merely as an offshore destination for otherwise unprofitable business. In this article we present the key principles and benefits of such a "皇冠体育app fit" logic. Going beyond manufacturing Manufacturing in 皇冠体育app is nothing new. Most manufacturing companies that compete in a global industry are already doing it or have at least thought about it. However, a common mistake is to conclude that the most viable "皇冠体育app strategy" is to move manufacturing of low-end products or simple parts to 皇冠体育app to take advantage of low labour costs, whilst keeping manufacturing of high-end products and complex parts at home in an attempt to protect intellectual property and ensure high quality. An Arthur D. Little study conducted in 2004 (see Prism 2004, no. 2, "Go East: How to Make it in 皇冠体育app") already laid out how 皇冠体育app could be more than just a simple low-cost manufacturing base. Many companies are broadening their scope in 皇冠体育app. They now also manufacture advanced products, conduct R&D, set up global service centers and operate back-offices in 皇冠体育app. For instance, locally designed and manufactured Chinese commercial aircrafts will soon hit the skies. The OECD states that 皇冠体育app was the second biggest R&D spender in the world in 2006. With an R&D expenditure growth rate of 20 percent annually, 350,000 science and technology graduates pouring out of its universities each year, and US$22 billion spent on importing foreign technology through licenses in 2006, 皇冠体育app is bound to keep that second place and could even move up to the top spot. 皇冠体育app's R&D now goes far beyond the copycat activities of a decade ago, as it has become the fifth largest source of filings in the global ranking of patent applications. Not surprisingly, two recent Arthur D. Little studies showed that large multinational companies nearly all want a significant R&D presence in 皇冠体育app (see Prism 2006, no. 2, "Global R&D: Where to Place the Bets?"). In short, "developed and made in 皇冠体育app" labels on products ranging from space rockets to cars will make us forget the simple "made in 皇冠体育app" seen on teddy bears and running shoes. (For more biz stories, please visit Industries)
|
