Deslocalization Strategy

ESEUNE Business School Weekly Articles

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Prepare yourself before

Sandra Ibáñez Ibarlucea

Sandra Ibáñez Ibarlucea graduated from Deusto Business School in 2013, where she studied a Bachelor degree in Business Administration with a Marketing specialization. She also graduated from Carlos III University in 2014 where she studied a Master degree in Management of the Film Industry.

Sandra has worked for almost a year in Exercycle S.L. one of the biggest fitness companies in Spain; and approximately two years in the Spanish Film Industry, in charge of private investment on audiovisual production.

Currently she is attending a Global MBA in China from ESEUNE Business School (Spain).áñez-ibarlucea/65/a46/4a1

For a while, the business trend has been to come to China. Lot of these companies came searching to expand the company and find new markets in the globalization world; others on the contrary came to China searching low costs and cheap labour. Moreover, to reduce the low material prices. This delocalization has been improve these last years with the economic crisis.

From this migration, can be concluded 10 years after, than there are 2 different types of possibilities, to success or to failure like most of this companies do (and return to their countries).The reality is that there is only one difference between both, their business strategy to delocalize the company.

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The first thing offshoring companies must face is a question. Why? Why I am trying to go to China? Is it necessary? What is demanding this action? This is the first mistake of this companies, come to China because everybody does. Only the companies following their clients has success in their adventure of coming to China.

Another key aspect in the success or failure of this kind of company has been the few clarity in their value proposition. In the moment you decide to create your own company, you must now what are you offering to your clients. An example, if you are competing in low prices, you cannot target client of high purchasing power. It is necessary to be coherent in order to keep the loyalty of the consumer.

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Finally, and for me the biggest strategy mistake from companies that come to China is to think that everything is going to be in the same way that in their country of origin. Coming to China involve adaptation to laws and costumes. Learn how to deal with problems in the Chinese way.

To all the forgoing , itis necessary to make a deep analysis for they own Company before trying to come to China, and also define meticulously the lines of the strategy that the company must follow in case of coming to China. For a general overview, the company must do a CANVAS, a marketing tool that allow everybody see in one look the main aspect of the company, partners, costs, incomes and your purpose value.

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Final conclusions for a Company that want to go offshoring:

  1. It`s really necessary?

  2. Purpose Value as main objective of the company

  3. Chinese people ALWAYS will have working advantages than foreigners.