is followed by 2.5 years of rollout and follow-up to secure the widespread
adoption and full industrial and societal benefits from the project (see
figure).
During the first 2-year development phase, the SfG project will intensively
follow and support the six Danish companies as they develop their busi-
ness to target the Chinese mid-market.
world. The Chinese mid-market is particularly promising, because future
economic growth in China will lift hundreds of millions of consumers into
the middle class which will drive a huge demand for affordable consumer
products and the resulting industrial products. Many Danish companies
are already well established in China in the high-end segment of the
market, so taking a step downward to a mid-market position may be easier
for them than entering a completely different emerging market in a new
geographical region. However, many companies find it very difficult to
move downward to market segments with lower prices and margins, but
also much higher volume. Almost by default, Danish products and ser-
vices tend to target the more niche-like premium and high-end segments
of the market.
the Chinese mid-market, so far only few Danish SME's have managed to
build profitable and sustainable positions in the mid-market segment.
have spent approximately 15 months on their path towards success on
the Chinese mid-market. The companies have not yet completed their
business development projects and established a profitable and sustain-
able position on the market. However, they have all struggled with a set of
barriers and in some cases, have found creative ways to progress forward
that may be valuable to other companies in similar situations.
top management at the Danish headquarters and with the project teams
at the subsidiaries, during educational sessions in China, and through
progress reports and meetings with the project teams. All the business de-
velopment projects have been analyzed for process barriers i.e. conditions
that prevent the projects from progressing as expected. Simultaneously,
we have analyzed many other case stories from Danish and Western com-
panies operating in china. A common pattern of barriers has been identi-
fied and structured into four general preconditions or keys for success,
i.e. conditions within a company that must be in place before setting out
to conquer the Chinese mid-market or otherwise, the initiative will most
likely not succeed.
of SME's on the Chinese
mid-market are:
opportunities in the Chinese mid-market
are great, but so are the challenges. Top
management at headquarter sponsoring the
initiative must truly aspire for success in
the Chinese mid-market and allocate the
necessary resources for it.
is very different and very dynamic, so the
organization must be quick in adapting to
new and ever changing conditions.
the customers in the Chinese mid-market
differ radically from other markets, so avail-
ability of market insight is crucial to avoid
traveling blindfolded through uncharted
territories.
ment and the project team must be flexible
to move from an idea to a stage of knowl-
edge and planning which can support an
investment in developing a new mid-market
business.