Cree Lights up the Bird's Nest at the 2008 Beijing Olympics
Top 10 Findings: Creating a Winning Business in China
Published in the News & Observer
http://www.newsobserver.com/2011/10/02/1530065/cree-nurtured-its-ties-in-china.html
New entrants often make the mistake of approaching the Chinese market with a narrow focus on sales growth. This myopic focus generally fails to address the Chinese market as a whole, specifically overlooking the intricate role that government plays in the domestic economy. When the government speaks, all should listen.
Burt's Bees listened very carefully for many months. They discovered that animal testing, which Burt's does not do, was required for imported cosmetics. To make sure they understood the regulatory issue thoroughly, they talked to 18 agencies at the federal and provincial levels. It took two years to figure it out.
Geikie said that working with the Chinese government was "totally important" during the assessment stage. The global consulting firm they engaged had their own government relations arm and Burt's also worked with a local Chinese law firm. When they got contradictory points of view, they kept digging deeper until they heard consistent answers. With China's strict 5 year plan, they wanted to make sure they were basing their decision off the right data. They now have additional government relations help from Clorox as well as the partner they ended up choosing, so Geikie is comfortable they have good resources to work with the Chinese government effectively.
Just over five years ago, Chris James, vice president of strategy and business development at Cree, recalled the moment when he received a request from a woman representing the solid state industry in China wanting to bring a delegation to pay Cree a visit. It was fortuitous that Cree accepted this meeting as it marked a key moment in their China adventure.
"China fully understood both the energy dilemma they faced, and the potential to mitigate a large portion of the problem through LED lighting as they projected the country’s growth rate and likely future energy requirements. They had done the math and had taken action to address what they saw as a real crisis. Today, there are still scheduled blackouts in China because of the need to conserve energy," said James.
He continued, "the delegation which included half private manufacturers and half government people shared with us their calculations on the potential energy impact of large-scale adoption of solid state lighting." Having spent 14 years in Canada, the delegation leader had the east meets west ability to foster what would soon become a winning relationship for the Chinese government, Cree, and Chinese manufacturers. Together, they could tackle the cited Chinese government’s challenge.
During the work up to the Olympic games, where the government wished to display technology prowess by demonstrated LED lighting on a grand scale with LEDs from Cree, the head of Cree, China, received a call from the governmental agency in charge of constructing the Water Cube. At the same time, Professor Luoxi Hao from Tongji University in Shanghai, suggested the Water Cube as a marquee site to light up. A complex project that ran into issues, Cree dug in and worked diligently with the team to solve and light up the cube in very short order. Then, in February 2008, the minister responsible for the Bird's Nest who had seen the light of the Cube now wanted his venue to be made LED, providing Cree yet another monumental opportunity to shine.
The Olympics were the deciding factor for launching their success in China mightily quickly. Cree lit up the Olympics not only in the water cube and the bird's nest, but the journalists' building and opening ceremony. Every manufacturer that Cree cared about knew about Cree before the Olympics were over. From negligible revenues in China, Cree now has 36% of their total revenues from China.
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