By Ron Cune

In Europe most enterprises are highly specialized with a strong focus on their core business. Their market position and its core-competences are frequently monitored. In strategic reports terms like: ‘core business’, ‘specialization’, ‘focus’ etc. are hard to avoid.

Finding this kind of highly developed core-competence approach in Mainland Chinese companies is more the exception than the rule. Chinese designers and builders of sophisticated yachts can also be trading in rubber for car tiers at the same time. A well-known large transportation enterprise is into futures trading in Shanghai, manages real-estate and produces generic medicines. This kind of branch diversification is considered normal in China.

Many foreign entrepreneurs feel uncomfortable doing business with companies which are seemingly missing lack of focus. We value clear-cut specialization as sign of quality and professionalism.

Because of the rapidly changing economic environment, Chinese enterprises target on fast expansion and economy of scales. The business focus is not at the core-business; the business focus is on the positive result on the consolidated profit and loses overview.

Chinese companies see this way of entrepreneurship as a form of risk management. Our European way of specialization is considered as highly dangerous. We put all your eggs in one basket!

 Though we are used to specialization rather than branch diversification, it is best just to investigate that part of the company that is related to your field of business, rather than being concerned about the overall strategy of the company.

Important is who manages which division. Especially at bigger companies the management structure is complex and short of transparency. At initial meetings, you will find that many people of different divisions join at the table. It won’t be really clear who is responsible for what.

Therefore, best is to prepare business meetings well, plan in advance who you really want to talk to and what you want to talk about.

This just to make sure you keep focus in a non focused business surrounding

Ron Cune, DragonDancers