China Analysis and Outlook 2006

China Analysis and Outlook 2006 reveals an emerging opportunity to rebalance economic and political influence.

china_fcast_06Part II of the 2006 Economic Forecast featuring David Hale (presented Part I) and Lyric Hughes-Hale. Here, I present my notes of Lyric’s talk, followed by my observations.

Background: China’s development and situation are far more complex than U.S. news sources report. It has seen significant economic liberalization during the past 25 years, and it shows every sign of continuing on that trajectory. However, the country is politically conservative. There is no freedom of the press. That said, the authoritarian government may produce reform much more quickly than if China had been democratic because the democratic process often slows reform. China is far more open and engaged on the world stage than it has been in many years. […]

Economic Outlook 2006

Annual Economic Forecast 2006

SMA 21st Annual Economic Forecast 2006 is my coverage of the SMA/Harvard Club annual confab featuring David Hale and Lyric Hughes-Hale

The Strategic Management Association and The Harvard Club jointly sponsored the Economic Forecast 2006 featuring David Hale and Lyric Hughes-Hale. David presented his encyclopedic knowledge and perspective on global economic trends, while Lyric shared her insights on China in Part II of the evening (she was the founder of China Online and has focused on China for several years.).

As usual, I present my notes, followed by my insights. Here are my notes from David’s presentation (Part I of the meeting).

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The Enterprise Innovation Lock-in Phenomenon

Adam Hartung of Spark Partners led a compelling and thought-provoking discussion at this month’s MITEF meeting on 14 March in Chicago. Adam is a veteran of a bevy of management consultancies and large corporations who has spent the last four years researching a hypothesis about innovation, writing a book (The Phoenix Principle) and consulting. His observations are straightforward, profound and potentially healing for industrial economy companies.

Summary of the Meeting and Discussion “Lock-in” is a corporate phenomenon that is fatal for organizations because it prevents new thinking. New thinking is increasingly important because the market is more volatile than ever. Lock-in happens in a cycle: in its formative stage, the corporation experiences success, and success “hardens” into a success formula; it leaves an imprint on executives, workers and customers, who all identify with the success. Of course, the problem arises when the market moves and nullifies some key assumptions that are embedded in the success formula. There are three types of lock-in:

Behavioral lock-in: group-think, not invented here; slow decision making; rigid ideas about customers and products; sacred cows. Profits from financial manipulation. Structural lock-in: many, but one stood out–“biased toward easily quantified, traditional actions and against more speculative […]

Surprises in Emerging Chinese Consumer Market

Surprises in the Emerging Chinese Consumer Market highlights the Internet-powered practice of consumer collaboration and group buying for discounts.

“Chinese Consumers Overwhelm Retailers with Team Tactics,” The Wall Street Journal, February 28, 2006 is a perfect example of how mature market assumptions can lead to surprises in emerging markets. Chinese consumers increasingly meet on the Internet chat rooms to plan and coordinate a group buying strategy for a type of good or even brand. Then they go to the retailer as a group to extract significant group discounts. This practice is known as tuangou, or team purchase, and can play havoc with companies’ pricing strategies and margins, to say the least.

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