Cree lights up the Bird's Nest at the 2008 Olympics
Top 10 Findings: Creating a Winning Business in China
Published in the News & Observer
http://www.newsobserver.com/2011/09/25/1512399/burts-bees-saw-opportunity-challenges.html
Cree, a Durham-based LED innovator, has always been a global business but it took a long time for the business in China to grow. A key factor in the development of the business there was the commercial - and then personal - relationship with a company called COTCO Luminant Devices, and its owner, Paul Lo. The founders of Cree were big on trust which fit with building "guanxi", critical in Chinese business relationships. Top Cree executives got to know Lo well and in turn learn about China.
In March 2007, Cree acquired COTCO Luminant Device Ltd, one of Lo's holding companies. Owning COTCO provided Cree with a low-cost manufacturing platform and would offer strategic access to the important and fast growing solid-state lighting market in China. While the deep science work remains in RTP, Cree now has manufacturing and business development functions in China. Investing in a well rounded presence on the ground in China builds critical goodwill.
There are several alternative methods to enter China as a foreign invested enterprise (“FIE”). Some of the key alternatives that may be pursued separately or together depending on a company’s resources and level of expertise, include: (1) test markets, (2) partnerships, joint ventures, or alliances through a third party to set up a 'representative office', or (3) a wholly foreign-owned enterprise.
Quintiles, headquartered in Durham and best known for its global management of clinical trials for biopharmaceutical products, has had a presence in China since 1997. In recent years, China has been given elevated strategic priority and as such, at the start of 2011, nearly 100 of the worldwide leaders of the 20,000-person company traveled to Shanghai for their Quintiles Global Leadership Meeting to be exposed first hand to China's healthcare system.
Thomas Wollman, SVP of Global Central Laboratories and Cardiac Safety for Quintiles, is responsible for all global lab operations and lab project management. He shared that back in 2003, they worked through contacts in China to identify 19 potential partners from which they chose their final partner.
In 2004, Matthew Szulik, past CEO of Red Hat, had the foresight to make China a major corporate priority and hired Michael Chen, a native of China with U.S. graduate degrees, to be general manager of Red Hat China. Chen had spent the prior summer helping to put together a China market feasibility plan looking into entry options of (1) greenfield (2) joint venture or (3) acquisition. Red Hat decided to pursue a greenfield approach and build from the ground up. With the backing of corporate that China was a strategic priority, Chen was empowered to grow and develop product and pricing specifically for the Chinese market.
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