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It's clear to most international business people that the future of global trade greatly depends on what happens with the two Asian powerhouses,
The numbers are compelling.
The middle class of each country is expected to hit 500 million people by 2012. This suggests a potential consumer market of 1 billion people. Blinded by the possibility of increased dollars, yen or euros, marketers eagerly look for any possible way to gain entry into these countries.
When companies start to add the low cost of labor in these countries to the proximity to emerging consumer markets, it's easy to see why they want to do business there.
However, many marketers are getting bloodied on the front line. We can't just take a plane ride, open up our briefcases and sell to these countries. It takes time and an enormous amount of effort.
A great way to test a
Beyond the basic investments needed for any overseas market,
However, many American and European companies are concerned that the concessions extracted by
For example, when Boeing wanted to sell aircraft to
In order for mobile telephone carriers to gain access to
Offsets frequently are utilized to keep the trade balance in line. An offset is when a
Recently, a European food-processing firm entering China was required to hire 50 percent Chinese management (thus necessitating training them), 100 percent Chinese engineers, 100 percent Chinese labor, build the factory with Chinese construction materials and submit blueprints to the Chinese patent offices for the proprietary technology that was being imported into China.
The European company eagerly agreed to all the concessions. Though the average pay is still under $80 per month in
If you wish to have access to these markets, you need something to give. It can be money, technology, jobs, intelligence or new skills.
The ultimate challenge then would be how can we give to gain access while still protecting ourselves? If we hand over too much IP, won't our customers come back as competitors?
There's good news, however. The most sought-after commodity we can give is intelligence.
China and India covet our business intelligence, sales competence, marketing savvy, modern management techniques, data in worker productivity, environmental clean-up techniques and entrepreneurial creativity.
And the better news is that we're already selling it, as well as giving it away. Anyone who registers with one of our universities, reads our management texts, subscribes to our business papers or surfs our Web sites can gain this know-how. So, in fact, we're being asked for what we are already prepared to part with.
The smart negotiator will try to sell it, not just give it away.
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