Systematic Approach to Your Joint Venture
SCI's 9-Step Joint Venture Process can help you get your China JV up and operating with the right partner and ahead of plan. While most companies today are setting up wholly owned operations in China (so-called "WFOEs"), JVs can still be the preferred model, especially where the China side brings critical technical capability or market access.
The biggest mistake that Western companies make in China is poor homework. As the former US Minister for Commercial Affairs, Thomas Lee Boam, emphasized, "Companies often do not fully investigate the market situation, don't perform the necessary risk assessment, and fail to get counsel. Lack of thorough due diligence is the primary cause of financial loss for American businesses."
Some of the key issues that must be addressed in advance include:
- Overall market structure and potential
- Ability to meet certain price points for your products
- Identifying several key candidate partners
- Assessing partners and determining the strongest candidate
- Understanding the partner's ownership structure, financial standing, market capability, etc.
- Adequate management capability
We've helped many companies develop both JVs and WFOEs in China, including Alcatel's RFS division, DelStar, Inc., Orcon Corporation, Claremont Flock Corporation, M&C Specialties Company, and Zeks Air Drier Corporation. See our Project Abstracts for some typical examples.
And we have years of experience in market and competitive analysis and product positioning, feasibility studies, and JV documentation. We know markets and we've performed such work with companies like Kodak, Unisys, Alcatel, Sartomer, Lonza, Teleflex, and numerous small and mid-sized companies. And we've worked in a wide variety of markets: power machinery, utilities, chemicals, telecommunications, aviation, pharmaceuticals and others.
Check what our references say about us and then give us a call.