Procter and Gambles success story in China
Entry StrategyEntry into China was part of P & G¡¯s strategy to globalize its operations. ... In the early 1980s, P & G set up an investment bank in Hong Kong with Hutchison Whampoa Group, which was intended to channel investment into the Mainland of China. Hutchison Whampoa Group, in which Li Ka-shing had controlling shares, had extensive business networks in China and a lot of experiences in dealing with the Mainland. ... Unlike other multinational corporations, P & G chose Guangzhou as the first point of entry and the base of their China operations. The reasons why Guangzhou was chosen as the point entry were, among others, a) its geographic proximity to Hong Kong; b) its leading role in China¡¯s economic reform and opening up. ... In 1992, China furthered its effort in economic reforms and opening up. ... It was in the same period, P & G China Ltd. ... According to relevant regulations, P & G China Ltd. is allowed to make investment and re-investment in China.PerformanceP & G experienced an overall success in its joint venture investments. For several years, P & G Guangzhou was among the top 500 joint ventures in China. ... 334 20 400 Source: Statistical Yearbook on China Market 1997 P & G¡¯s products have also achieved dominant positions in their respective markets. ... Success factorsLeading the industry in technological innovation and product qualityWhile introducing products that have been successful in other markets, P & G has also been actively promoting the R & D capabilities in China. ... The company is also responsible for coordinating the joint research and development projects with external research functions in China. ... So far, P & G¡¯s distributors have covered over 2200 cities and counties in China. ... Promoting the training of talent and development of human resourcesThis is another important success factor of P & G in China. ... P & G¡¯s management staffs come from three different sources: a) expatriate management staffs from P & G¡¯s overseas operations; b) management staffs from the Chinese partner organization and c) graduates and post-graduates from the best universities in China. ... This is also important success factor of P & G¡¯s investments in other countries. ... As a part of the expansion efforts, P & G had a plan to import production lines for the production of paper diapers in China. ... August 18 of 1998 was the ten-year anniversary of P & G¡¯s investment in China.