Monday, August 22, 2011

Must Read Monday: China Should Change Its Perspective From Engineer To Marketeer

From an engineer's to
a marketeer's perspective,
one bridge too far?

Photo: Danny Friedmann
Malcolm Moore wrote a great article for The Telegraph about China's challenges to transform its industries from the world's manufacturers to the world's innovators, and how this good be a boon for some British companies. Read here.

Mr Moore wrote about the challenge suppliers to foreign companies, such as Foxconn, face:

"These Chinese companies are more confident, but they are led by engineers," said Geoff McCormick, the head of Alloy, a design firm that has been active in China for decades. "These firms are now being asked to be brands and not just engineering-led. But they have no track record at creation.They are happy to spend money, but only if they think there will be a return. So these are very difficult decisions for Chinese chief executives to make," he said."

And of course foreign companies will not be amused when their supplier starts to make their own competitive products under their own trademark. In some law firms there is the phenomenon of applying so called Chinese walls (information barriers), to separate one part of the firm which is representing one party from another part of the firm which is representing another party with contrary interests. It is highly doubtful whether Chinese walls can effectively be applied during the manufacturing process of a supplier/competitor.

For all foreign companies that complain about bad intellectual property in China. As long as Chinese companies copy the products of foreign companies, their problems are quite limited and can be solved or mitigated by using the enforcement routes effectively. The real challenge starts when they offer a better designed product under a more attractive brand. Legitimate competition is the real challenge.

1 comment:

FOARP said...

Having worked in the IP department at Foxconn, I do not think they will move into marketing their own brands any time soon. Why?

1)The Foxconn brand is (literally) poisonous right now.

2) Foxconn have been very successful so far with their current model.

3) Foxconn is a Taiwanese company, and is not quite so married to the idea of switching from manufacturer to innovator simply because the PRC government says they should.Taiwan has plenty of innovative companies, Foxconn has nothing to prove in this regard.

4) The brands that Foxconn does have (mostly motherboards) haven't made any great shakes.

Sure, they'll make the switch eventually, but I'm willing to bet a (small) amount of money that they won't do so in the next five years.