According to research conducted by Daxue Consulting, China is investing heavily in disruptive innovations that require high technological capabilities. The government also animates public management authorities to revise the current systems with new technologically more advanced solutions. Do foreign companies have a chance to step into the B2G business (Business to Government) in China? Clement Mougenot, Head of Research at Daxue Consulting stresses the difficulty: “Management of data collection in the Chinese market is a very sensitive topic, particularly by foreign companies, whether this is weather, environment, or pollution – especially when the government is involved which oversees the installation of detection equipment.”
The client dared to tackle the challenge of a market-entry in China
Daxue’s client, a well-developed company, providing remote sensor systems for detecting wildfires and integrating them into fire management systems, aimed to enter the Chinese market. Therefore, the company approached Daxue Consulting to assess the market potential for its environmental monitoring systems in China, identify opportunities and threats, as well as the intensity of rivalry in the market.
A tailor-made project to identify essential know-how for the client
Daxue Consulting started with a comprehensive desk research analyzing the business environment. It included a general overview of existing similar environmental monitoring systems in China, geographic distribution, climatic conditions to consider, current policy, regulations, and laws, major market players, and the market size, respectively the number of square meters of forest in China.
As a second step, the research team organized a mystery call project, conducting so-called smart calls. Daxue Consulting designed those to support the initial phase of the research and to obtain additional first-hand insights from the client’s competition by pretending to be a forestry bureau, for instance. Thus, the consultants could benchmark marketing and development strategies, obtain knowledgeable information about installment and the basement of the server, and gain deep insight into the existing product portfolio comprising innovations and patents.
Furthermore, Daxue Consulting communicated with the government and conducted in-depth interviews with relevant market experts. It helped the team to detect ways of a B2G relationship, identify other potential customers in the private sector for the client’s environmental monitoring systems in China, and to evaluate the market entry through possible Chinese partnerships. The research team could identify essential know-how such as
- The procedure of tendering in China
- The attitude towards foreign companies in the respective sector concerning a partnership
- Purchasing processes of potential customers and key concerns such as the different requirement of the technological equipment due to geographic and climatic conditions
How could the research facilitate the decision and implementation of the client’s environmental monitoring systems in China?
Finally, Daxue Consulting cross-analyzed the gathered data and provided the client with a detailed report about the current situation and prospects of environmental monitoring systems in China. The consultants prepared a full strategic conclusion defining the ideal entry strategy for the client. It comprised challenges, opportunities, and the most suitable business model concerning structure, products, pricing, and potential customers. The team also considered political, economic, social, technological, environmental, and legal aspects in the analysis.
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Related case
Daxue Consulting also carried out a project for a client operating in a similar field, providing a unique, wireless, portable sensor device (B2B as well as B2C). The company approached Daxue Consulting to help them develop a distinctive, meaningful, and memorable name. Read more about Naming in China:
Product launch & naming project in China
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