The Power to Redirect the Company

Xiangyang Wu was told that he would soon leave the company head­quarters in Shanghai to work for two years in the U. S. plant. His job is to help understand the needs of consumers in the United States. He had just finished working with a consultant from the United States who the company hired to teach them how to develop their own products. To date, the company had been a major supplier, man­ufacturing furniture for other companies in Europe and the United States, but it had not entered the realms of product design or mar­keting.

The company’s goal now is to develop its own furniture and cre­ate a unique brand and line of products for the United States. Management has decided to bypass the traditional route of starting in low-cost markets and working its way up the quality ladder; the goal is to produce premium furniture from the beginning. Management does not want to undersell the competition; they want to be ahead of the competition by introducing a new style influenced by Chinese heritage.

The company wants to create its own brand. Market trends appear to be in its favor with the growing interest in Asian-influenced products. The challenge is to find the right balance of current U. S. taste and to blend that with the right features of Chinese furniture. Xiangyang is an expert in the history of Chinese furniture, and his new assignment is to become an expert in the emerging tastes of the high-end U. S. market.

China and its companies have arrived on the international stage. The rise of the Chinese corporation brings with it amazing opportu­nities and serious challenges for other companies around the world. The Chinese-as-cheap-labor model has already changed. The German firm Siemens, whose strength has always been its German engineering, now relies on Chinese engineers for many products. The Chinese company Haier has a plant in the United Sates in Camden,

South Carolina, and has already become a significant market player in several U. S. white goods markets. In 2004, the regional government of Wuxi, China, organized an international conference on design. Its award ceremony had more than 25,000 people in atten­dance. During the conference, a design executive from Haier gave a presentation about his company’s strategy for global expansion, revealing how the company already has established product develop­ment centers in several countries to acquire a sense of the emerging needs of those markets. These centers have a blend of designers, engineers, and marketing from Europe, the United States, and Asia. The Chinese government is supporting the move of China-based companies from being component suppliers to original design manu­facturers. Just as Japanese and Korean companies have accomplished in the past 30 years, China is ramping up economically using global resources and knowledge to accelerate its economic growth. No com­pany today can avoid responding to this new global force. The only true competitive advantage left for companies in the West and across the globe is innovation.