IBM

IBM

STRATEGIC MARKET ANALYSIS • CHINA • INDIA • RUSSIA

IBM____________________________________________________________________Team C

Project team C Amsterdam, 16 okt 2009

Titelpage Titel: Strategic Marketing Analysis IBM Opdrachtgever: HvA & IBM Periode: Blok 1, semester 7 Plaats: Amsterdam, 16/10/09 Projectteam: Team C Projectleden: Arie Langelaar Floris van Halm Zoë van den Bergh Charlotte van den Berg

Contactperson:

221503 226954 500838 217945

Arie Langelaar   06-27535334 [email protected]

2

IBM____________________________________________________________________Team C

Management summary IBM is global. In this report the BRIC-countries China, India and Russia are analyzed in regard of IBM’s operations. Following these depth analysis are the opportunities and recommendations for these individual countries and IBM’s respected departments there. China The Chinese economy is growing, despite the economic crisis. The IT sector in China is growing too. This sector is very important for the Chinese government. China is planned to improve the e-infrastructure in over 120 cities. China’s people and workforce are more and more educated and skilled, because of the always improving education system. The Chinese government has a lot of influence in every part of the market. A good relationship with the Chinese government and a good understanding of the market is essential for IBM. All these points are opportunities for  China. Key strategic recommendations for China: * Moving key processes one step at a time to China due to cost reduction * Increasing effort for cooperating with Chinese government  * Enhancing schooling projects and talent scouting the next few years

Russia The IT sector is growing very fast in Russia and has a high educated workforce. The infrastructure is very bad and that’s why IBM works together with the government of Russia to improve the IT infrastructure. The Soviet era has left Russia with two things IBM should benefit from: old technology and very experienced (weapon-) scientists. Russia also has a short ‘time to market’, which means new developments and trends can be quickly transformed in new products here. This reduces a lot of costs. Key strategic recommendations for Russia: *Using Soviet-Union leftovers *Maintain a good relationship with the Russian government to further increase Russian business for IBM  *Quickly adapting to new developments benefiting from Russia’s short time-to-market  *Russia as the base of IBM for the development of information technology 

3

IBM____________________________________________________________________Team C

India The IT sector is one of the biggest growing sectors in India. The IT sector is led by the outsourced services (export). IBM Global Services is the world's and also India's largest information technology services and consulting provider. The government supports the IT sector  with Software Technology Parks. Key strategic recommendations for India: *Co-operation with Indian Government * Green India ,introducing and developing green technologies and systems * Development of domestic market by collaboration

4

IBM____________________________________________________________________Team C

Index

Foreword Our first big international assignment at the HvA. We started with great ambition and motivation to succeed, and we promised we would overcome any obstacle. Quickly we discovered this was a totally different project than anything we had before. A huge company, countless different (sub)sectors in which IBM operates and even more information to analyze and process. As time went by, obstacles were won and we gathered more and more insight and understanding of what was happening in our 3 specific BRIC-countries. Our key strength was an almost perfectly balanced team. There were fierce discussions, but those were always based on constructive criticism. Everybody had a certain (unspoken) role. Also was the cooperation effective because of clear agreements we made at the start of this project. With great pleasure we present you our project.

Team C   Arie Langelaar  Floris van Halm Zoë van den Bergh Charlotte van den Berg 

5

IBM____________________________________________________________________Team C

Introduction IBM stands for globalization. Already they are situated within 160 countries, with a great reputation everywhere. BRIC-countries are becoming more and more important for the world economy. IBM acknowledges this and is already situated in these countries. But is this sufficient? If countries are expanding rapidly, shouldn’t IBM? Main question: What can IBM do to expand the strategic position in these countries? 

‘’These countries’’ is hereby based on China, India and Russia. To answer this question, analysis must be made of the markets, specific sectors, current activities of IBM, possible opportunities and any risks we may encounter. This must be done in a very effective way; there will be a lots of information at our disposal but only a fraction of this will actually help answering the question. When this information is gathered, strategic advice can be given for each specific country. Risk management is considered, as well as national opportunities and threats. Different country, different approach. Advice must be clear, based on gathered information and concrete. It should help IBM expand their business in these big upcoming countries.

6

IBM____________________________________________________________________Team C

1. DESTEP* *Important note: only relevant DESTEP factors are mentioned.

1.1 DESTEP China 1.1.1 Demogr D emographi aphic c

Increasing number of people in China is receiving better education. Nowadays over 230 million Chinese getting three levels of education (elementary, junior and senior high school). IBM is committed to the Chinese society. To give China something back, IBM supports education and programs which are the base of the high results the Chinese achieve. From 1984 IBM works together with Chinese Universities and colleges. In 1995 an official agreement was signed, which means that IBM and the ministry of education agreed to cooperate on projects. Education gets on a higher level every year. Since 1995 IBM has donated a large amount of computer equipment to the Chinese education. IBM also provides children up to 6 years special children programs, to get a base for their future education careers in IT. It also helps schools to set up programs, teaches teachers and provide IT equipment, so children will get familiar with international standards at an early age. IBM is being respected in China by the Chinese media. IBM is mentioned as one of “China’s most respected companies”, “China’s most valuable brand”, “ China’s best employer” and so on. Demograph Demog raph ic profile pro file Year

2008

2013

2023

7

IBM____________________________________________________________________Team C Population ( x millions) Men Women

1.330,0 684,2 645,8

1.375,5 705,9 669,6

1.446,0 736,5 709,5 Demographic Demographic construction Age % of total population

0-14 15-64 65+ Source: US census Office (estimates 2013 and 2023)

19.8 72.1 8.1

Source: Worldfactbook, CIA

1.1.2 1.1.2 Economy

China is known for its fast- and ever growing economy. In 2006 the economy grew with 11,1 per cent. In 2007 this was 11,9 per cent. Despite the measures of the government to limit the overcapacity, the investments are still growing. In 2008, nine per cent of the economic grew was accounted for the GDP. Since the autumn of 2003, the Chinese economy is overheated. Lots of provinces are lacking commodities and energy, so factories can’t produce constantly. In different industries, like the cement, steel and cars industry there is overcapacity. The government is making measures to reduce this overcapacity. One of those measures is to limit the banks lendings and to raise the interest.

1.1.3 1.1.3 Economic indicators Growth GDP per year (%)

Employment

Year  Labor (million) Unemployment (%)

2005

2006

2007

790.1 9.7

795.3 9.5

800.7 9.2

2006 2007 2008 2009

10,6 % 13,0% 9,0% 8,0%

Average consumer prices increase (%)

2005 2006 2007 2008 2009

1.8 % 1.2 % 4.8 % 5.9 % -0.6 %

1.1.4 1.1.4 Technological

The Chinese IT segment will grow like the rest of the Chinese economy. Government’s policy is focused on innovation and developing new telecommunication techniques. Priority is given to software and outsourcing. IT is responsible for about 7.5 per cent of the GDP which is about 15.9 billion euros. There are 170 million Internet users, 372 million fixed lines and 508 million users of mobile telephony. 8

IBM____________________________________________________________________Team C

China is known for its illegal copying of software. Figures are hard to determine, because there are no independent parties which provide these. Foreign companies have 65% of the software industry. China’s access to the World Trade Organisation has done the software industry well. Since 2003 import taxes on software have disappeared. More and more western companies have to cut costs on IT. China wants to be an attractive software outsourcing country. In 2006 the ministry of commerce gave 5 cities the ‘national export software’ status. Six cities got this status before. The second tier cities have the advantage of  lower salaries then first tier cities. China also wants 10 cities to be a ‘service and outsourcing bastion’. These should provide services on existing products, such as Business Process Outsourcing and Information Technology Outsourcing. To stimulate this there are so called ‘science parks’. Science parks can help by protecting Intellectual Property Rights (IPR) for example. The importance of hardware will decrease in the future. China wants to focus on BPO, ITO and software development. IT-market structure China in percentages 2006 2011 2007-2011 Hardware 63.3 50.2 10.1 Software 11.7 11.9 15.7 IT-services 25.1 37.9 25.2 Source: Technical Scientific Attaché

A new development is the production of cheap laptops. Lenovo, who took over the computer  division of IBM, announced in 2007 that it will produce laptops for rural areas for only 199 US dollar. The government will definitely support this plan. Internet is being censored by the government. In the past it used to be stricter, but still there is no liberty like in western countries. Compared to speed of broadband connections in the Netherlands, the Chinese connections are slow. Speed of downloads is about 30 to 100 kbps in large cities like Beijing or Shanghai. Foreign websites can be hard to reach. When glass fibre connections between China and the US will be realised, Internet will provide a capacity of 60 times as much as now. The Chinese are working on a 4G technology. This technology would be able to reach a speed of 100 mbps. If this will succeed, China will be ahead of great parts of the world. China plans on asking approval to the International Telecommunication Union (ITU) in 2008 or 2009. Probably telecommunication will be restructured in 2008. China wants to create a fair  competition between existing parties. Differences between market share and margins are too large at the moment. 1.1.5 Ecological

The Chinese economy is internationally known for its growth and promise for the future. But China pays a big price pr ice for that economic growth. The fast growing industry causes massive pollution of air and water. In the past 6 years, the number of congenital abnormalities discovered by newborn babies has risen with 40%. Environmentalists in China are making great efforts to ring the alarm bells on this matter, but the federal government isn’t listening. 9

IBM____________________________________________________________________Team C

7 of the 10 most polluting cities worldwide are in China.

China is the most polluted country in the world, and that’s not going to change in the near future as China is still strongly focusing on economic growth, while the environment is suffering. 1.1.6 Political

In China, the central government still decides what happens with its economy. It controls the economy with so called ‘five year plans’. In the plan for 2006 – 2010 is described how it will stimulate innovation, internationalization and equalising different ar eas socially and economically. Foreign business will be stimulated as well, and will provide a lot of employment.

1.2 DESTEP India 1.2.1 Demographic

India's population of approximately 1.17 billion people (estimate for July, 2009) consists of  approximately one-sixth of the world's population. India has the second highest population in the world. There is a increasing number of working age people, and the unemployment rate at the moment is 7.8%. In the eleventh five years plan, which runs to 2012, the expectation that unemployment at the end of the period will amount to less than 5 percent. It is however not take into account the large number of Indians that is not fully employed. India has been a low wages country for a long time but a shift has been noticed, the rising economy makes room for increasing wages within growing markets and sectors. Especially within the IT market this chance in noticable. The IT sector is growing and employs a large amount of cheap, well educated and English speaking IT-professionals. Every year 80.000 new IT experts graduate. 1.2.2 Economy

The economy of India is the twelfth largest economy in the world by market exchange rates and the fourth largest by purchasing power parity (PPP) basis. Since 1991, continuing economic liberalisation has moved the economy towards a market-based system. A revival of economic reforms and better economic policy in 2000s accelerated India's economic growth rate. By 2009, India had prominently established itself as the world's secondfastest growing major economy. India's large service industry accounts for 54% (2.86% is contributed by the IT sector) of the country's GDP while the industrial and agricultural sector contribute 29% and 17% respectively. Agriculture is the predominant occupation in India, accounting for about 60% of employment. The service sector makes up a further 28%, and industrial sector around 12%. The labor force totals half a billion workers. Major industries include textiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, information technology enabled services and software. 10

IBM____________________________________________________________________Team C

After several years of vigorous growth (of over 9 percent per year) India is now in the wake of  the global credit crisis. Expected economic growth in 2008/2009 fell back to a level between 5.5 and 7 percent. Even though the growth number decreased, India remains one of the fastest growing economies in the world, with a large domestic market that remains strong. Because of  India’s relatively low dependence on exports, the impact of the global recession remains somewhat limited. The growing sectors at the moment are: manufacturing, construction of ships, pharmaceauticals, aviation, biotechnology, tourism, nanotechnology, retailing and telecommunications. Economic indicators GDP (2008) GDP growth (2009 // estimate) Inflation (2009 // estimate) Import (2008) Export (2008) Public debt (2008)

$1.209 trillion 6,7% 8,1% $287.5 billion $175.7 billion $163.8 billion

1.2.3 Technology

The growth in the IT sector is attributed to increased specialization, and an availability of a large pool of low cost, but highly skilled, educated and fluent English-speaking workers, on the supply side, matched on the demand side by an increased demand from foreign consumers interested in India's service exports, or those looking to outsource their operations. The share of India’s IT industry to the country's GDP increased from 4.8 % in 2005-06 to 7% in 2008. In 2009, seven Indian firms were listed among the top 15 technology outsourcing companies in the world. In March 2009, annual revenues from outsourcing operations in India amounted to US$60 billion and this is expected to increase to US$225 billion by 2020. Foreign direct investment* investment * (annex)

According to preliminary figures, foreign direct investment in the fiscal year 2008/2009 27 billion U.S. dollars, despite the global crisis still well above the 24.5 billion U.S. dollars of the year. In recent months (February, March), however, gave a drop of between 50 and 75 percent seen over the same period last year. Foreign direct investment, April 2000 - September 2008, cumulative* (annex) 1.2.4 Ecology

The rapidly growing population and economic development are leading to the environmental degradation in India through the uncontrolled growth of urbanization and industrialization, expansion and massive intensification of agriculture, and the destruction of forests. It is estimated that the country’s population will increase to about 1.26 billion by the year 2016. The projected population indicates that India will be the first most populous country in the world and China will be ranking second in the year 2050. India having 18% of the world's population on 2.4% of world's total area has greatly increased the pressure on its natural resources. Water  shortages, soil exhaustion and erosion, deforestation, air and water pollution afflicts many areas.

11

IBM____________________________________________________________________Team C

About 1.2 billion people in developing nations lack clean, safe water because most household and industrial wastes are dumped directly into rivers and lakes without treatment. This contributes to the rapid increase in waterborne diseases in humans. Out of India's 3119 towns and cities, just 209 have partial treatment facilities, and only 8 have full wastewater treatment facilities. Indoor air pollution from burning wood, coal and animal dung is widespread. 70% of  rural households in India lack ventilation. In the Eleventh Five Year Plan India* (annex) shows that it is working for the environment. They want to: • • • •

Increase forest and tree cover by 5 percentage points. Attain WHO standards of air quality in all major cities by 2011-12. Treat all urban waste water by 2011-12 to clean river waters. Increase energy efficiency by 20 percentage points by 2016-17.

1.2.5 Politics

The economy of India is based in part on planning through its five-year plans, developed, executed and monitored by the Planning Commission. The Eleventh plan* (annex) completed its term in March 2007 and the eleventh plan is currently underway (2007-2012).

1.3 DESTEP Russia 1.3.1 Economic

After years of economic prosperity Russia is facing a economic crisis. The effects of the economic downturn are felt in all parts of economy. But there are signs of light recovery. In June 2009, the industrial production decreased, but in lesser extent than the first half of 2009. The direct investments also decreased but with less higher percentage. In the first quarter of 2009 the import and export from goods decreased. However, remarkable is that the import of goods and services decreased much more than the the export. This is due to the strong decrease of the import of Capital goods. The trade surplus also shrunk from an estimate of 71 billion euro’s to 30 billion euro’s. In 2009 the minimum wage in Russia is about 100 euro’s a month. However, the average wage in Russia in April 2009 was 412 euro’s a month, 25 per cent higher than a year year back. What remarkable is that the wages in big cities are higher than in the smaller cities. In 2009 the EIU (Economist Intelligence Unit) predicts a light decrease of inflation to an estimate of 12,1 percent. This is two per cent lower than in previous years, but still it’s a bit high.

Economic indicators GDP growth (in per cent)

2007

2008

2009

8,1

1,2

-7,0

12

IBM____________________________________________________________________Team C Inflation (in per cent) Export (in billion USD) Import (in billion USD)

9,0 355,2 223,1

14,1 236,8 -135,7

12,1 125,5 -82,2

(source EIU, BMI, Ost-West Contact)

1.3.2 Social Cultural

Russian consumers embrace the western trends and brands. For marketers, Russia became an attractive market. According to Givi Topchishvili, the CEO of ‘Global Advertising Strategies’ western companies must keep an eye on cultural differences between western Europe and Russia. For instance, the Russian consumers sometimes are capricious in his or her choices, but are open to western products. The Russian consumer is also very quality conscious and the tendency appears that western trends are being magnified. The CEO of ‘Global Advertising Strategies’, Givi Topchishvili gave four tips to marketers who wanted to enter the Russian market: Find a reliable partner that has got an eye for cultural differences between Russia and the company’s home country. At the planning of complex media campaigns, marketers should consider that some media suddenly can disappear. Russians are very direct; in business but also in the consumer market, a direct approach is necessary to create a good relationship. r elationship. Do business like Russian; not on the golf course, but in the sauna with trust in your chosen partner. 1.3.3 Technology

The amount of internet users is growing annually with 15 per cent. This trend will continue until 2011, which will then consist of 44 million Russians. 30 percent of the population of Russia will be using the internet. This calculation is made by the Public Opinion Foundation (POF). The Russian internet users are mainly between the age of 25 and 34 years. Almost 67 percent of the internet users are located in the European part of Russia, particularly in the cities Moscow and Saint Petersburg. The expectations are that the internet users in these regions will grow rapidly in the upcoming years. 90 per cent of the Russian companies are using internet for business purposes, a website is vital for these companies. Internet connections in Russia 600.000 2000 17.600.000 2005 2010* 26.100.000 *estimate // source: EIU 

Russia has a bad reputation on safety. The downside of high education level of the Russians is that the country has a growing number of hackers, viruses spread in computer networks domestically and abroad. The high education level in technology in Russia also has a downside. Russia has a growing number of hackers and the viruses spread in computer networks all over the country and abroad. Russian hackers are feared all over the world. 13

IBM____________________________________________________________________Team C 1.3.4 Ecological

Russia can be seen as global environmental donor. The country has 20 percent of the forest on earth, it has most of the uncultivated land, vast water resources, ecosystems and unique biodiversity. Russia has many natural resources that are very important to the worlds economy: Russia has 30 percent of the world's gas, about 10 percent of oil reserves, 50 percent of the diamonds and 25 percent of all the nickel and 17 percent of the tin. A good environmental policy is therefore important not only to Russia but for the whole world. In the field of internal environmental management companies in Russia remain inadequate. Many of the investments in this area could bring immediate benefits to business and society, because waste is avoided and resources can be saved. At the time of the Soviet Union there was a very effective recycling of glass: Consumers took old bottles back to the store after the bottles were refilled. This system is stopped and there is a big waste problem created by all disposable packaging. Russia is a major international energy supplier, especially in oil and gas. Russia supplies gas to Europe. The biggest oil and gas companies are Gazprom, Lukoil, Transneft and Rusneft. Currently Gazprom is primarily concerned with the state construction of a large number of new gas pipelines, especially in Eastern Siberia and the Russian Far East for the Chinese market. The oil and gas exports are a significant part of the Russian trade and have, among others ensured that Russia could accelerate the repay of its debt. Russia also has more than 400 thermal and hydro-electric power stations and 10 often outdated nuclear power plants available, which all but two are situated in the European part of Russia. The plan is to build more nuclear reactors, in total in the next few year they want to build 40 new nuclear reactors. 1.3.5 1.3.5 Political

Leading international democracy and human rights organizations consider Russia to be an undemocratic nation, allowing few or no political rights and civil liberties to its citizens. International pro-democracy organization Freedom House ranks Russia as 'not free', citing 'carefully engineered elections' and a complete 'absence' of debate. Amnesty International accuses Russia of committing wide ranging human rights abuses including granting impunity for murderers of human rights activists, imprisoning political dissidents and operating a system of arbitrary ar bitrary arrest.Human arrest.Human Rights Watch claim Russia commits grave human rights violations in Chechnya and allows the systematic abuse of migrant workers. Freedom of press in Russia is considered amongst the worst in the world by press freedom organization Reporters Without Borders and is ranked 141st in the world for press freedom in their annual survey. The Russian Russian Authorities 'black list' figures that are critical critical of the government, practice 'official harassment', and 'gag' potential dissidents.

2. IT Sector  2.1 IT sector global

14

IBM____________________________________________________________________Team C

Global purchases of IT goods & services will equal $1.66 trillion in 2009. This is a decline of 3% compared to 2008. The declining of the US dollar boosted the 2008 growth rates, but a stronger  dollar will hurt the growth rate of 2009. Expectations are that the IT purchases will recover in 2010, growing by 9%. The recession in the US and other industrial countries is the main cause of the expected decline in 2009. In 2009, Canada, Latin America, Western and Central Europe will have the weakest growth, between 1,3% and 1,2%. The US IT-market will show a slightly better growth of 1,6%. The Oil exporting areas of Eastern Europe, the Middle East, Afrika and Asia will show the biggest growth at 3% and 5%, in the end of 2009.

Source: IDC

India and China are at the top of the fastest growing markets in the IT services sector. In 2010 China will have a market share of 24% and will overtake Australia. India will have a market share of 13% in 2010 and will overtake Korea in 2011. Below: a list of market shares in 2010. On the other hand, India remains at the top of the IT outsourcing services. The Philippines, Mexico and Malaysia are emerging IT services countries, but these countries are currently still no threat to India. India has a large cost advantage and very good talents compared to the competing countries. Russia is hoping to tap the growing U.S. appetite for getting work done offshore. A Moscowbased information-technology outsourcing company (Luxoft) opened its world marketing headquarters in Montvale, N.J., in February. This Russian effort by businessmen to promote the former communist country's IT industry as a skilled backroom to the world's corporations, is much the same way Indian outsourcers have done. The only country that could be a threat for India is China. They have a lot of manpower and the Government of China supports the increasing IT services sector. India has no threats in the short term, but it is important that the government continues to support the IT services sector if  they want continue to be the most important in the outsourcing market. The infrastructure still has to improve. The sectoral composition of investment has remained fairly stable globally, with electronics, transport equipment, and the Information and CommunicationsTechnology (ICT) sector  15

IBM____________________________________________________________________Team C

continuing to dominate. The foreign investments in these sectors sectors create jobs. Below you can see the top ranking countries for job opportunities.* (annex)

2.2 IT Sector China Rapid growth

The Chinese IT sector is expected to grow rapidly the upcoming years. Through innovative policies and the development of new infrastructure for telecommunication the Chinese government encourages investors to invest. In 2006 the Chinese IT sector was accounted for  15,2 billion euros, this amount represents 7,5% of the total Gross Domestic Product (G DP). In the first half of 2007 alone, the IT sector grew with 34 per cent. Between 2008 and 2012 China’s IT sector expect an average growth of 15% per year. The key drivers for China’s booming IT services are the finance, retail & manufacturing and telecommunication markets. The most important services for these markets are: System Integration, ERM (enterprise resource management) and Communication Infrastructure. The IT sector is very important for the Chinese government. In their Eleventh Five year plan, China is planned to improve the e-infrastructure in over 120 cities. The traditional technologies will be updated to new technology standards to handle the increasing demand for new services and software. The investments in the IT sector also growth rapidly. In the first half of 2007, more than 15 billion USD were invested in fixed assets. This represents an increase of over 34 per cent. The biggest growth was seen in the electronic components segment, followed by the Telecom and Hardware segments. Important IT business centers

Different regions in China became very important business centers for IT-outsourcing. This business centers are located in the Province of Jiangsu and the city Dalian. Both regions have highly educated people because of their good university system. The Province of Jiangsu became a popular destination for foreign investors thanks to the good infrastructure. In the Province Jiangsu, the cities cities Nanjing, Wuxi, Suzhou and Changzhou Changzhou became a business area where over 1900 foreign and domestic companies are located. The city Nanjing is specialized in the development of software and BPO. The city of Wuxi is specialized in software for the Japanese market. The city of Sozhou is specialized in embedded software and Research & Development. The city Changzhou is specialized in digital content and animation. The total revenue of software and IT outsourcing in Jiangsu was an amount of 8 billion USD in 2007. In the city Dalian, over 680 companies are located in the High-Tech Industrial Development Zone (HTIDZ). The core business of these companies is IT-outsourcing for mainly the Japanese and Korean customers. But their goal is to focus also on the European and American customers. Especially in Jiangsu the IT-sector is growing despite the economic downturn. In the first five months of  2009 this sector grew with 50 per cent. The city of Dalian estimates a growth of 35 per cent in the end of 2009. 16

IBM____________________________________________________________________Team C

Over forty per cent of the companies in Dalian is set by foreign investors. In Jiangsu about the half of the companies is financed by foreign investors or by a joint venture with a Chinese partner. Both regions are trying to attract more investors from other countries than Japan and South Korean. In the Province Jiansu and the city Dalian the IT-sector is strongly supported by the local government with tax benefits and exemption from import. In Jiangsu companies can make use of  grants for training purposes.

2.3 IT Sector India Valuable brand equity

The IT sector in India is knowledge-based. Efficient utilization of skilled labor forces in the IT sector can help an economy achieve a rapid pace of economic growth; and the Indian IT industry is growing fast. The industry has built up valuable brand equity for itself in the global markets. IT industry in India comprises of software industry and information technology enabled services, which also includes the business process outsourcing industry. Expectations are that IT-enabled services will be the fastest growing sector in the IT market. India is considered a pioneer in software development and a favorite destination for IT-enabled services. In 2008-09 the total income of the IT sector was 71,7 Billion US Dollars, a 12% growth in comparison to the previous year. Almost 60 Billion US dollar is made within within the software and IT-enabled services. services. A good 47 Billion US dollar comes from the export, a 16% growth compared to the previous year. Though the IT sector is growing fast, the contribution of this sector to India’s GDP is still rather small; 2,86%. The IT helps many other sectors in the growth process of the economy mostly the services and manufacturing sectors. The largest markets of distribution for IT services in 2008:

Trends and developments A few developments are now visible: - India India want want to redu reduce ce the the depend dependenc ence e on the the Amer America ican n market market.. - More and more more develop development ment of of software software takes place in India India itself itself,, no longer longer ‘on site’ site’ at the customer. - The salari salaries es in the sector sector have strongl strongly y grown grown the the previous previous years, years, that that could could be on the the expense of their status being a low wages economy. - Futhermore Futhermore there is a shift taking taking place place to smaller smaller urban urban areas. areas. The The importan importance ce of the domestic market increases. Big deals are made within the public and private sector. At the moment there are a few sectors in India growing dramatically: manufacturing, construction of ships, pharmaceauticals, aviation, biotechnology, tourism, nanotechnology, retailing and telecommunications. These are all opportunity markets for the IT branche. To stimulate the economy the government is supporting export with a project. Software Technology Parks of India is a government agency in India, they established the Software Technology Park scheme. This is an export orientated scheme for the development and export of computer software, including export of professional and IT-enabled services. It provides physical infrastructure, including dedicated high speed connectivity to technology parks, freedom 17

IBM____________________________________________________________________Team C

for 100% foreign equity investment and tax incentives. 60% of Indian software export courses through Software Technology parks.

2.4 IT Sector Russia Post-Soviet era The Russian IT sector is growing phenomenally – starting from 2000 with the annual growth rate of 25-30%, overstepping all other industries. After the collapse of the Soviet Union this industry suffered drastic losses. While Russia in the early Nineties did not lack educated specialists in the fields of mathematics, computer science, and information theory, the IT equipment leftover from the Soviet era was almost useless, and many scientific institutes were shut down. Quite naturally, the first steps for the post-Soviet Russian IT industry were associated with importing a variety of hardware. These patterns established in the 1990s have led to the current market structure, where the hardware rather than software commands 58% of the IT sector  market. The other factor that differentiates the Russian IT sector from more mature IT markets is that most of the companies exercise all-round approach to business as opposed to concentrating on individual new products. The Russian government and major corporations are currently the principal buyers of IT goods and services. This was extremely positive for initial development of the sector: it created the necessary volume of orders for the infant industry to develop. However, this situation has now changed with the emergence of small and medium-sized enterprises (SMEs) and even Russian entrepreneurs working out of small offices/home offices (SOHOs) with their growing demand for  IT products and services. Increasing the rapid penetration of Russian cities by competing telecommunications companies offering high-speed Internet services will accelerate this development.

Trends IT sector  • The organizational challenges of a modern, globalized economy dictate the need for advanced IT products. • A booming economy has given Russian companies ample cash to spend on IT projects, especially companies in the natural resources, financial, and telecommunications sectors. Analyzing the market trends, we have distinguished the following priority areas for investment in Russian information technology: • Development of software, its applications and services • Outsourcing of IT services • Services and software targeted towards SMEs, SOHO and individuals

3. IBM worldwide

18

IBM____________________________________________________________________Team C

IBM’s total revenue in 2008 was 103.630 million dollars. 18% (18.653,4 million dollars) of the total revenue was made up within the growth markets and they had an overall revenue growth of  10%. The major markets showed a minor growth performance in comparison to the growth markets. The BRIC countries had a higher overall revenue growth number than the growth markets. The fastest growth number came from India with 33% revenue growth in regard to 2007. Revenue growth with regard to 2007: Growth Markets BRIC countries India

10% 15% 33%

3.1 IBM in China In 2008, IBM had a revenue of $ 2,6 billion, with over 18.000 employees in 26 offices. One of  eight research centers of IBM is in Beijing. There are approximately 150 people working here. The focus in this centre: Business integration and transformation, information and knowledge management, future embedded systems and devices, resilient and pervasive infrastructure, and user interactions. IBM also has a development centre in China. China development center (CDL) is the development center which is listed fifth in the worldwide list. Divided in three big cities (Beijing, Shanghai and Taibei), IBM has several thousand software engineers. IBM’s software department and the system department provides the development, the test, the globalization, the technical support and the customer service.

3.2 IBM in India IBM in India has expanded its operations considerably with regional headquarters in Bangalore and offices in 14 cities including regional offices in New Delhi, Mumbai, Kolkata and Chennai.

19

IBM____________________________________________________________________Team C

IBM Global Services is the world's and also India's largest information technology services and consulting provider. IGS provides the entire spectrum of customers' e-business needs -- from the business transformation and industry expertise of IBM Business Consulting Services to hosting, infrastructure, technology design and training services. IGS delivers integrated, flexible and resilient processes -- across companies and through business partners -- that enable customers to maximise the opportunities of an on-demand business environment. In 2005, IBM announced the acquisition of Network Solutions Ltd., a leading infrastructure services company in India. This strategic investment will enable IBM to augment its networking and managed services portfolio of offerings in India and broaden its reach across the country. India is an important market for IBM and the company has been making significant investments from time to time. Multiple offices and business centres are located in India.* (annex) IBM shares the belief that India can unleash its true potential only through making IT available to and usable for large numbers of people. IBM's Community initiatives focus on education and children and leverage its expertise in technology to address societal issues. IBM has partnering relationships in India with a number of educational institutions. The majority of IBM’s revenue in India..* (annex)

3.3 IBM in Russia The IBM company arrived in Russia in 1974. In the decades of presence in Russia the company considered IBM Russian specific character and manufactured the optimum diagram of the proposal of production and the services. The special attention is given to the development of  relations with the company partners. Today, IBM Eastern Europe and Asia (IBM EE/A) is headquartered in Moscow, Russian Federation; with offices in Saint-Peterburg, Russian Federation; Kiev, Ukraine; Tashkent, Uzbekistan and Almaty, Kazakhstan. The Systems and Technology Laboratory (RSTL), IBM’s first R&D operation in the EE/A territory, was established in January 2006. Today, the site population reports to STG, although the team is working to broaden its mission in the future, as the STG work is established. RSTL is working on the full life cycle of product components and technology for STG worldwide, in software and hardware for high-end computing, high-end storage, and special algorithms and scientific computing. This includes IBM System z mainframe, which has high synergy with the historical ЕС-ЭВМ development in Russia, as well as mainframe-connected storage, other  server products and high performance computing. IBM has chosen to put the laboratory in Russian Federation because of the importance of the fast-growing Russian market to the company, and because of the excellent technical skills and technical education in the country. The RSTL builds on successful development work with business partners since 1999 in Russian Federation and Belorussia. The IBM employees in RSTL and the business partners work together in an extended operation that we plan to continue and grow.

20

IBM____________________________________________________________________Team C

4. SWOT analysis 4.1 SWOT China Strengths •

•

•

IBM has a strong recruiting system, which secures the flow of new talent. IBM does not see China as a source for  cheap labor but as a potential market. IBM is working with local staff this include the senior management.

Weaknesses •

IBM has his main ad ministration in the US due to this they will lose margins on sales and administration.

21

IBM____________________________________________________________________Team C

Opportunities

Threats

The market •

•

•

•

The market for IT services in China is growing rapidly. The economy will rise with more then 15 per cent annually. Finance, telecommunications, manufacturing and retails are the big drivers for China’s growing IT services. Outsourcing is expected to account for up to 30% of the IT services in 2010.

•

•

•

The Country •

• •

Good educational system. Many welleducated persons are entering the market. The Chinese population is growing. Lots of people rise above the poverty line. They will need more luxury services and products.

•

Foreign companies face increasingly competition from domestic firms Other companies are trying to set up long lasting partnerships with the Chinese government. Because of the five-year plan, the Chinese Government has got more influence on economy than the market does. The global prices of primary goods are rising due the growing demand from China and India. The Chinese economy is overheated. Lots of Provinces are lacking commodities and energy, so factories can’t produce constantly.

The government •

•

•

•

The Chinese government is stimulating the IT markets, by producing more valuable goods with better margins. The government is stimulating internationalization internationalization and innovation. The demand of government IT services continues grow. In its "Tenth Five-Year Plan" China declared to invest a lot of money in the environment. With investments of 85 billion U.S. dollars, they are trying to achieve their  environmental objectives.

4.2 SWOT India Strengths

Weaknesses

•

Highly skilled human resource

• Shortage of suitable IT-engineers IT-engineers

•

Low wage structure

• Less Research and Development

•

Quality of work

•

• Contribution of IT sector to India 's GDP is still rather small. Initiatives taken by the Government (setting up (only 2,86%) Hi-T Hi-Tec ech h Park Parks s and and impl implem emen enta tati tion on of egovernance projects)

•

• Employee salaries in IT sector are increasing tremendously. tremendously. Low wages benefit will soon come to an end.

English-speaking professionals

22

IBM____________________________________________________________________Team C

•

Cost competitiveness

•

Quality telecommunications infrastructure

•

Indian time zone (24 x 7 services to the global customers). Time difference between India and America is approximately 12 hours, which is beneficial for outsourcing of work.

Opportunities

Threats

•

High quality IT education market

•

Lack of data security systems

•

Increasing number of working age people

•

Countries like China and Philippines with qualified

•

India 's well developed soft infrastructure

•

National Players in the market (joint ventures)

•

Global delivery system

•

Growth within various sectors

•

•

workforce workforce making efforts to overcome overcome the English English language barrier  •

IT development concentrated in a few cities only

There is a shift taking place to smaller urban areas. The importance of the domestic market increases. Big deals are made within the public and private sector. India want to reduce the dependence on the American market.

4.3 SWOT Russia

Strengths •

•

IBM is working with highly educated local staff, this include the senior management. IBM is working together with the Government to improve the IT infrastructure of Railways, Airports and Ports.

Weaknesses •

IBM is an American company so they can be counteracted by the Russian government.

23

IBM____________________________________________________________________Team C

Opportunities •

• • • •

•

•

•

High educated workforce. Availability of working staff. Short ‘Time to market’. Technical Competence. Deep reservoirs of creative technological talent. Many big american companies like Walmart, Coca-Cola and Starbucks are investing in the Russian market. New technologies are becoming more popular in Russia and replacing old technology Market saturation in the big cities of Russia forced companies to focus toward the regions.

Threats • •

•

• • •

Bad infrastructure. Russia's hackers pose growing global threat. Russian government has got a lot of  influence in every part of the market. High unemployment rate. Politically unstable. Corruption and excessive bureaucracy deters many foreign investors.

5. Most important opportunities 5.1 China

- The economic growth, despite the worldwide economic crisis The Chinese economy continues to grow, even through the economic crisis. The middle class has reached medium size, and is still growing. Well over 100 million people already qualify as middle class. These citizens require more and more Western quality and comfort, therefore harboring major opportunities for IBM.

24

IBM____________________________________________________________________Team C

- The education growth China has realized their shortcomings (which came hand in hand with opportunities) a few years ago. Mass production, a huge workforce and low cost personnel didn’t complete the package which was needed for guaranteed international success. They needed highly-educated and skilled personnel to secure the success of (inter)national trade. Education has been rapidly improving since, and will keep growing for the rest of the foreseeing future. This means more capacity for IBM in this giant country to expand. - Technology outsourcing China is promoting its information technology outsourcing sector as a rival to the market leader, India. The figures, however, paint a different story. In 2006, the Chinese IT services market reached $15,2 billion, a growth of 17.8 per cent compared with that of the previous year. On the other hand, software and services exports from India for 2006-07 grew by 33 per cent to mop up $31.4 billion and the domestic segment grew by 23 per cent to garner $8.2 billion, according to Nasscom's figures. "China has the potential, but India has the edge," claimed Nasscom Vice-President Vice -President Ameet Nivsarkar. http://www.rediff.com/m http://www.rediff.com/money/2007/jul/04bpo.htm oney/2007/jul/04bpo.htm

Given these facts, it’s still a great growth gr owth rate for China. With a lot of governmental subsidies and a huge workforce available which will continue to improve in education, there lies great chances for IBM to expand in this enormous country. - Governmental cooperation When doing business in China, it is important for foreign investors to learn to coordinate with the China government, especially establishing good relationship with government bodies dealing with foreign trade and economic cooperation. Especially for IBM, which is one of the biggest companies in the world, it’s important to have full government support for their projects.

5.2 India

- Growing Sectors The IT profits from many other sectors in the growth process of the economy mostly the services and manufacturing sectors. At the moment there are a few sectors in India that are growing dramatically: manufacturing, construction of ships, phar maceauticals, aviation, biotechnology, tourism, nanotechnology, retailing and telecommunications. These are all chances for the IT

25

IBM____________________________________________________________________Team C

branche and IBM. The majority of IBM’s revenue is generated within these sectors and as they are growing a lot more opportunities will arise from these markets.

- Increasing number of working age and educated people The increasing number of working age people is a opportunity as the IT sector keeps on growing. New people to graduate, new people to keep keep the market growing. A growing market creates new job opportunities and will make the annual turnover in this sector increase. This will boost the contribution of the IT sector to India’s GDP. Not only the number of working age people is increasing, the number of educated people is also growing. The large amount of  cheap, well educated and English speaking IT-professionals are of influence on India being a big player on the Global IT market. Every year 80.000 new IT experts graduate, these graduates are all potential employees for IBM. IBM is capable of training this people up to a level that their  skills will be greatly productive to IBM, as well as the domestic Indian market. The growth of  potential employees and educated people will benefit the continuity of IBM India. - Government support Software Technology Parks of India (STPI) is a government agency in India, established in 1991 under the Ministry of Communications and Information Technology, that manages the Software Technology Park scheme. It is an export oriented scheme for the development and export of  computer software, including export of professional services. It provides physical infrastructure, including dedicated high speed connectivity to technology parks, freedom for 100% foreign equity investment and tax incentives. STPI provides physical hosting for the National Internet Exchange of India. These STPi’s are responsible for a large amount of export growth and income. They offer opportunities for IBM to export their products through these technology ports and be profitable for themselves and the Indian export. - Climate change India has undertaken numerous response measures that are contributing to the objectives of the United Nations Framework Convention on Climate Change (UNFCCC). India's development plans balance economic development and environmental concerns. The planning process is guided by the principles of sustainable development. Reforms in the energy and power sector  have accelerated economic growth and enhance the efficiency of energy use. These have been complemented by notable initiatives taken by the private sector. In the last few years several measures relating to environmental issues have been introduced. They have targeted increasing significantly, the capacity of renewable energy installations; improving the air quality in major cities (the world's largest fleet of vehicles fuelled by compressed natural gas has been introduced in New Delhi); and enhancing afforestation. Other  similar measures have been implemented by committing additional resources and realigning new investments, thus putting economic development on a climate-friendly path. In the Eleventh Five-year plan a few goals were set: Increase forest and tree cover by 5 percentage points. Attain WHO standards of air quality in all major cities by 2011-12. Treat all urban waste water by 2011-12 to clean river waters. Increase energy efficiency by 20 percentage points by 2016-17. • • • •

26

IBM____________________________________________________________________Team C

To make sure the set goals will be reached, measurements need to be taken. Multiple sectors can co-operate by re-engineering their production processes and decrease their carbon emission and develop and use efficient energy and power solutions. IBM needs to be part of this change, they need to be a brain behind the solutions and plans, therefore this is a big deal opportunity for IBM. 5.3 Russia

- Soviet-Union leftovers During the Cold War many people in Russia were highly educated. Very skilled technological talents were used for the Russian nuclear program. Nowadays there is a deep reservoir of  creative technological talent but some of these people must be retrained with the focus on IT instead of weaponry. If done successful, IBM could be working with the most intelligent researchers in the world. For IBM, this finding offers opportunities, Russia can be a main place to develop information technology. IBM also has to maintain relationships with Russian universities to tap Russia’s creative IT talent and create new technological applications. - Old technology As mentioned above, Russia has significant leftovers from the Soviet-Union. Not only did they leave extremely experienced scientists, there is also a lot of old technology still used. Great opportunity for IBM, as power plants, research facilities and schools desperately need technological improvement. Key factor is convincing the government to partner with IBM, because most of this old technology is in the hands of the government. - Short ‘time to market’ Russia is capable of fast development of a product. The time delay between the product idea and the moment the product is launched on the market, is very short. This is caused by the highly trained workforce and the good work attitudes of Russian people. A short time to market also reduces a lot of costs. Big opportunity here is responding to new developments instantly. If IBM spots a trend or  development, Russia could be used to effectively respond quickly in a global way. It is very important that this happens flawlessly to keep the brand value.

6. China, India and Russia; the differences 6.1 IT Sector  ‘’The total value of software and services exported from China was an estimated $1.8 billi on in 2006, according to analyst estimates, paltry compared with India’s estimated $41 billion export revenue in the year to March 2008 ’’’’ http://www.livemint.com/2008/05/12235447/IT-sector-booming-but-China-h.html

The lack of knowledge and experience causes China to be at a disadvantage against India in the IT outsourcing sector. The more experienced and better schooled workforce in India has 1 27

IBM____________________________________________________________________Team C

crucial advantage; they master the English language. Therefore India can operate easily worldwide, while China is mainly doing national business. Of course, more and more Chinese are learning the English language so in the future this advantage will disappear. We see a totally different development in Russia. The first steps for the post-Soviet Russian IT industry were associated with importing a variety of hardware, because most of what was left was useless. These patterns established in the 1990s have led to the current market structure, where the hardware rather than software commands 58% of the IT sector market. The other  factor that differentiates the Russian IT sector from more mature IT markets is that most of the companies exercise all-round approach to business as opposed to concentrating on individual new products. The IT sector in Russia is basically a few steps behind China and half a mile away from India. 6.2 Networking and way of doing business

There are great contradictions in China, India and Russia in doing business. They are all experiencing great transformations, because of different reasons. China and (in lesser extent) India are characterized by gradual institutionalization, whereas Russia is going for the opposite. This is because former procedures and organizations in Russia have been inefficient and corrupt, while China had none. Chinese networks tend to be small, and consist of family members, friends and colleagues. This guarantees certain stability. On the other hand the rules of guanxi  (informal connections) create barriers for the entrance of networks. Russian institutional chaos resulted in building new networks and strengthening others, which makes them more mobile and thus help them vitalize and expand their networks. In India there are different issues, namely the social way of doing business. Dead on deadlines and aggressive business is not recommend here. They tend to socialize a lot during networking, where family is very important. Choosing family over work is considered normal any day of the week. Deals are made at home, where important family values are discussed and private talk is considered normal.

Market Market Countries Market Size Growth Rate Intensity

Rank Index Rank

China

1

100

1

Index Rank Index

100

3

1

Market Consumption Commercial Capacity Infrastructure

Economic Market Freedom Receptivity

Rank

Index

Rank

Index

Rank

3

60

2

34

3

Index Rank

1

1

Country Risk

Overall Index

Index Rank Index Rank

4

1

55

1

28

Index

97

IBM____________________________________________________________________Team C

Russia

3

25

3

38

1

29

1

75

1

65

2

7

2

3

2

48

2

40

India

2

38

2

54

2

25

2

60

3

2

1

44

3

3

3

24

3

36

India: •

•

At the moment there are still shortcomings in the Indian infrastructure. This delayed the economic growth of India. The market growth is stable and is high ranked.

China: •

•

The development of the infrastructure is improving. The Olympic Games in Beijing has lead to the development of the Infrastructure. There is still a lot to improve, but it’s developing fast. Problems with the environment are an obstacle to the sustainable growth of China.

Russia: •

•

Russia has a small domestic market. This could increase dramatically if consumers and business are reached better. Russia has great potential in terms of employees. Soviet-war caused research to excel any other  nation. They now face the challenge to convert war-knowledge to commercial use.

7. Which problems can be encountered? The way to a new exotic and developing market like China, India or Russia is a slippery one. It’s essential that you are well prepared and have a clear planning ahead of you, even more than traditional Western markets. IBM of course is already situated in these countries, which means they are familiar with business here. Fiscal matters and jurisdiction should form no further problems, as they already have been acquainted with these issues. On the other hand changes in these fast developing country should be watched closely as things can go fast and yesterday’s advantage could be tomorrow’s failure.

International Business Risks So what CAN IBM expect? We’ve listed some risks, divided in 4 categories from the Kotler and Keller book.

29

IBM____________________________________________________________________Team C

Commercial Risks • • • •

Timing of entry Weak partner  Poor execution of strategy Operational problems

Country Risks •

•

•

•

• •

Government intervention, barriers to trade and invest Bureaucracy, administrative delay, corruption Lack of legal safeguards for intellectual property rights Legislation unfavorable to foreign firms Economic failures and mismanagement Social and political unrest and instability.

Currency Risks • • • •

Currency exposure Asset valuation Foreign taxation Inflationary and transfer pricing

Cross Cultural risks • • • •

Cultural differences Negotiation patterns Decision-making styles Ethical parctices

Source: Kotler and Keller, Marketing Management

General Risks •

•

•

Every country has their own government with their own law-making. For companies it could be very difficult to settle in foreign countries. The different cultures could be barriers for companies. To reduce the risk it is necessary to have a intermediary. The economies in the BRIC-countries are growing, gr owing, though not very stable yet and closely alligned with the developed west. The infrastructure is not optimal in the BRIC-countries. The governments in each country should invest more in the infrastructure.

7.1 The biggest risks in China

Economic risk  The Chinese economy is overheated. This means that the demand is bigger than production capacity. Lots of Provinces are lacking commodities and energy, so factories can’t produce constantly. This means for IBM that they can not have their optimal profit, because of the no sales. Domestic risk  30

IBM____________________________________________________________________Team C

Foreign companies face increasingly competition from domestic firms. IBM is a foreign company in China. If China is getting more domestic companies it could be a risk for IBM. The domestic companies can produce cheaper and the sales reduce for IBM. 7.2 The biggest risks in India

Location risk  IT development concentrated only in a few big cities of India, because of the worse infrastructure in the country. In that case India is dependent of the government. The government should do something on the infrastructure of India. So IBM can expand all over the country. Security risk  Companies have a large database with a lot of important and personal information. Because of  the lack of security systems it is easy to obtain the data. Especially 7.3 The biggest risks in Russia

Security risk  Russia has a lot of hackers. It is a worldwide problem. Private information could be disclosed to people or companies (competitors). Foreign risk  Corruption and excessive bureaucracy deters many foreign investors. For foreign companies who invest in Russia it could be a risk, because of the corrupt treatment.

8. Strategic advice to IBM 8.1 China 8.1.1 Moving key processes one step at a time to China due to cost reduction

There are approximately 116.000 people working for IBM in the United States, against 18.000 in China. It’s strongly recommended, with the current technological, educational and economical 31

IBM____________________________________________________________________Team C

progress, jobs are transferred from the U.S. to China. Similar to IBM’s move of transferring work to India, where 5.000 U.S. jobs have been released. IBM is regularly sending key experts on different industry departments to these developing countries, and therefore increasing the competence and efficiency. When loan cost are drastically lower, and knowledge is quickly building up as well as well skilled personnel, the move to China is only logical. 8.1.2 Increasing effort for cooperating with Chinese government 

Chinese government spends more and more on the Chinese economy, especially innovation and internationalization, and IBM should profit from this. With the current economic growth gr owth in such a big country, there are seemingly endless recourses flowing to the government through taxes. With the current policy in China, all they want is pump up the economy even more, even though they are considering ecological factors more than they used to. There is massive expansion possible for IBM, and the government can play a big part in this. Some important factors: - 5 Year plan of the Chinese government. (IBM should be considered here.) - Economic growth - Educational growth - Skilled personnel combined with low wages - A domestic market with great growth potential So how does IBM improve their relationship with the Chinese government? Combating pollution. The people fear and hate it and the government recognizes it as a problem but has given priority to economic growth. Should IBM put effort in solving these issues, not only will it create a lot of  goodwill under the public, the government will be relieved of some environmental issues. A winwin situation. 8.1.3 Enhancing schooling projects and talent scouting the next few years

As mentioned before, education is rapidly improving. IBM needs the best workers in every single area. They need to have strict employment requirements to ensure IBM’s quality and innovation. Great opportunities lie in these facts. As students are getting more skillful and more efficient, IBM needs to improve their knowledge even further by giving (free) IT courses to in potential talented employees. A big problem, where and how does IBM find them? The answer is simple, an intensive search and recruitment department. Promoting IBM and the  job opportunities is essential. If that is successful, talent will find IBM instead of visa versa. The key factors: - Specialized headhunters for talent - Underlining good work circumstances at IBM (promotion) - High quality internal courses with up to date international IBM knowledge - Partnerships with schools and universities IBM needs to realize these talented upcoming students are the future, and should be treated accordingly. Opportunities arise as education is improving, and IBM should respond firmly in this promising country.

8.2 India 8.2.1 Development of domestic market by collaboration

32

IBM____________________________________________________________________Team C

India wants to be less dependent on the American Market and IBM India shares the belief that India can unleash its own potential. The importance of the domestic market will increase by making IT available and usable for a large number of people. Collaboration between IBM and other Indian companies can create value for both. IBM can educate them and help them grow a greater share in the market. This accounts for all the growing sectors in need of IT enabled services. These sectors are growing in India as well as they are responsible for a majority of IBM’s revenue: manufacturing, construction of ships, pharmaceuticals, aviation, biotechnology, tourism, nanotechnology, retailing and telecommunications. As these companies grow in value, IBM will benefit as a shareholder. IBM can target big partners as well as small/medium sized companies to enter this win-win situation. 8.2.2 Sharing the experience of the global delivery system with local companies

The Indian government supports the growing economy in India. The government is investing to create more opportuntities with companies oversea and create better infrastructure. In the Eleventh-Five year plan the Indian Government is working on better education, health care, infrastructure and environment. They are developing new plans and solutions to improve India’s living- as well as the business environment. The government is making Software Technology Parks available for the export of services, especially IT-enabled services. The more usage of the technology ports the bigger will be the Indian export and the profit. The use of a global delivery system in Indian companies would stimulate the export through the STPI’s. A co-operation between the government and IBM could get the Indian market ready to put this into work. 8.2.3 Green India

Not only the government is working on a better environment. Business are trying to improve their  processes and create new technologies and systems to work on a greener India. IBM has the advantage of being situated globally, many countries started the green project years ago. IBM can deliver these businesses with systems, technologies and advice to improve their  contribution to a greener India. With the knowledge, experience and locations IBM is capable of  cheaper and quicker development and production of these systems and technologies. This way IBM can further improve their relationship with the government and receive additional work in the Indian market.

8.3 Russia 8.3.1 Using Soviet-Union leftovers

The Soviet-Union brought the smartest researchers on the planet. A couple of decades later, there is still a lot of knowledge and skill. IBM should reform these in IT purposes. Nuclear  program specialists should be retrained and used on converting important ways of data collection, data analysis and everything else IBM can use to improve business processes and innovation. 33

IBM____________________________________________________________________Team C

Partnership is essential in this matter. IBM should consider rewards in return, like key places in the organization. Not only will this improve the general view on IBM partnering with old-weapon scientists but also encourage skilled knowledgeable workers to take their chances at IBM. 8.3.2 Maintain a good relationship with the Russian government to further increase Russian business for IBM 

The Russian government has a lot of influence in every part of the Russian market. In the near  future the Russian government is planning to spend more and more in the Russian economy. Specifically these funding will go in infrastructure and the IT sector. For IBM it’s very important to have a good relationship with the Russian government. This will result in government projects and favorable business conditions. Also it’s very important that IBM has to maintain relationships with Russian universities to tap Russia’s creative talent and eventually create new technological applications. If successful, IBM is looking at a bright future in Russia as it is steadily developing and there is a great amount of space left (not only literally) to expand. 8.3.3 Quickly adapting to new developments benefiting from Russia’s short time-to-market 

Developments in the IT sector are rapidly changing. For IBM it’s important to respond fast to upcoming developments and trends. For instance if a new trend in Europe appears, the staff of  IBM have to react fast. Russia is known for its short ‘time to market’. This is why IBM could use Russia when new developments arrive. Quickly adapting certain processes or even creating uniquely new products takes less time in Russia than anywhere else. IBM can use this in a global manner, launching first version products or services in Russia and developing them further in other countries. This way Russia IBM can focus on one thing only, the launch of new products and services which strengthens it’s position as a unique IBM establishment. 8.3.4 Russia as the base of IBM for the development of information technology 

Russia’s IT workforce is highly educated and there are a lot of creative technology talents. Labor  costs are also relatively low. For the development of information technology Russia can be an excellent place. If the first advice (8.3.1) is followed, this could well be the next step. 9. Sources list http://www.articleshub.org/article/2425/Indian-Education-Services--A-Hot-Opportunity.html# http://www.ibef.org/opportunities/ http://www.nasscom.org/Nasscom/templates/NormalPage.aspx?id=5365 http://www.nasscom.org/Nasscom/templates/NormalPage.aspx?id=57509 http://www.internationaalondernemen.nl/zoeken/showbouwsteen_dtb.asp?bstnum=80000 http://www.iloveindia.com/economy-of-india/it-industry.html http://www.economywatch.com/indianeconomy/ 34

IBM____________________________________________________________________Team C

http://en.wikipedia.org/wiki/Software_Technology_Parks_of_India http://offshore-softwaredevelopment.com/global-delivery-model.asp http://www.investmentcommission.in/it_&_it_enabled_services.htm http://www.indiastat.com/industries/18/industrialsectors/107700/stats.aspx http://www.naukrihub.com/india/information-technology/overview/swot-analysis.html http://www.telegraaf.nl http://www.nu.nl http://www.naukrihub.com/india/information-technology/ http://www.naukrihub.com/india/information-technology/overview/ http://www.naukrihub.com/india/media/overview/swot/ http://greathumancapital.wordpress.com/2007/01/31/swot-matrix-of-india-analysis-of-indiansocial-economic-political-technological-conditions/ http://www.economicshelp.org/essays/problems-chinese-economic-growth.html http://www.china.org.cn/english/2006lh/160403.htm http://www.pcworld.com/article/172097/ibm_green_city_lab_aims_for_chinese_government_deal s.html http://www-03.ibm.com/press/us/en/pressrelease/28143.wss http://www.internetworldstats.com/asia.htm http://www.russoft.org/docs/?doc=994 EVD: http://www.evd.nl/home/landen/landenpagina/land.asp? bstnum=5089&land=rsf&location=/home/landen/landenpagina/land.asp?land=rsf&highlight=# http://www.evd.nl/home/landen/landenpagina/land.asp? bstnum=5087&land=rsf&location=/home/landen/landenpagina/land.asp?land=rsf&highlight= http://www.evd.nl/home/landen/landenpagina/land.asp? bstnum=87405&land=rsf&location=/home/landen/landenpagina/land.asp?land=rsf&highlight= http://www.evd.nl/home/landen/landenpagina/land.asp? bstnum=140896&land=rsf&location=/home/landen/landenpagina/land.asp?land=rsf&highlight= http://www.evd.nl/home/landen/landenpagina/land.asp? bstnum=77184&land=chn&location=/home/landen/landenpagina/land.asp?land=chn&highlight= http://www.evd.nl/home/landen/landenpagina/land.asp? bstnum=875&land=chn&location=/home/landen/landenpagina/land.asp?land=chn&highlight= http://www.evd.nl/home/landen/landenpagina/land.asp? bstnum=147693&land=chn&location=/home/landen/landenpagina/land.asp?land=chn&highlight= http://www.computable.nl/arti http://www.computable.nl/artikel/nieuws/242389/250449/r kel/nieuws/242389/250449/rusland-biedt-volop-kansen-voorusland-biedt-volop-kansen-vooruitbesteden.html#ixzz0To5sv9Wq (bron ‘time to market’)

Mediatheek: Euromonitor international Mediatheek databases

10. Annexes 1.2.3 page 11 Foreign investments Land

Mauritius

Bedrag  x miljard US  dollar 

Aandeel in  percentages

32,65

44

35

IBM____________________________________________________________________Team C Singapore

6,11

7,99

Verenigde Staten Verenigd Koninkrijk

5,76 5,06

7,88 6,92

Nederland Japan Duitsland Cyprus Frankrijk Verenigde Arabische Emiraten

3,42 2,32 2,07 1,5 1,04 0,84

4,7 3,19 2,81 1,96 1,43 1,13

1.2.4 page 11 Eleventh plan (2007-2012) The eleventh plan has the following objectives: 1. Inco Income me & Pov Pover erty ty Accelerate GDP growth from 8% to 10% and then maintain at 10% in the 12th o Plan in order to double per capita income by 2016-17 o Increase agricultural GDP growth rate to 4% per year to ensure a broader spread of benefits o Create 70 million new work opportunities. o Reduce educated unemployment to below 5%. o Raise real wage rate of unskilled workers by 20 percent. o Reduce the headcount ratio of consumption poverty by 10 percentage points. 2. Education o Reduce dropout rates of children from elementary school from 52.2% in 2003-04 to 20% by 2011-12 o Develop minimum standards of educational attainment in elementary school, and by regular testing monitor effectiveness of education to ensure quality Increase literacy rate for persons of age 7 years or above to 85% o o Lower gender gap in literacy to 10 percentage points o Increase the percentage of each cohort going to higher education from the present 10% to 15% by the end of the plan 3. Health o Reduce infant mortality rate to 28 and maternal mortality ratio to 1 per 1000 live births Reduce Total Fertility Rate to 2.1 o o Provide clean drinking water for all by 2009 and ensure that there are no slipbacks Reduce malnutrition among children of age group 0-3 to half its present level o o Reduce anaemia among women and girls by 50% by the end of the plan 4. Wome Women n and and Chi Child ldre ren n o Raise the sex ratio for age group 0-6 to 935 by 2011-12 and to 950 by 2016-17 o Ensure that at least 33 percent of the direct and indirect beneficiaries of all government schemes are women and girl children o Ensure that all children enjoy a safe childhood, without any compulsion to work 36

IBM____________________________________________________________________Team C

5. Infr Infras astr truc uctu ture re Ensure electricity connection to all villages and BPL households by 2009 and o round-the-clock power. o Ensure all-weather road connection to all habitation with population 1000 and above (500 in hilly and tribal areas) by 2009, and ensure coverage of all significant habitation by 2015 o Connect every village by telephone by November 2007 and provide broadband connectivity to all villages by 2012 o Provide homestead sites to all by 2012 and step up the pace of house construction for rural poor to cover all the poor by 2016-17 6. Env Environ ironme ment nt o Increase forest and tree cover by 5 percentage points. Attain WHO standards of air quality in all major cities by 2011-12. o o Treat all urban waste water by 2011-12 to clean river waters. Increase energy efficiency by 20 percentage points by 2016-17. o

37

IBM____________________________________________________________________Team C

2.1 page 15

38

IBM____________________________________________________________________Team C

2.3 page 17

3.2 page 19 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 10. 11. 11. 12. 12.

IBM Innovation Center for Business Partners Linux So Solution Ce Center, Ba Bangalore IBM IBM Li Linux Co Competency Center, ter, Bangalore lore Softwa tware Inn Innovatio tion Center ter, Gurga rgaon Ind India Softw ftware Lab, Bangalore lore,, Pune High High Perf Perfor orma manc nce e On On Dem Deman and d Lab Lab in Indi India, a, Bang Bangal alor ore e Engi Engine neer erin ing g & Tech Techno nolo logy gy Ser Servi vice ces s Cent Center er,, Bang Bangal alor ore e India Research Laboratory , Delhi  Serv Servic ices es Inno Innova vati tion on and and Res Resea earc rch h Cent Center er,, Bang Bangal alor ore e Globa Globall Deliv Delivery ery Centr Centres es at at Ban Banga galor lore, e, Pun Pune, e, Gur Gurga gaon on and and Kolk Kolkata ata Glob Global al Busi Busine ness ss Solu Soluti tion on Cent Center er,, Ban Banga galo lore re Busin Business ess Tran Transfo sforma rmatio tion n Outso Outsourc urcing ing Cen Center ters s at Banga Bangalo lore, re, Delhi Delhi and and Mumba Mumbai  i 

39

IBM____________________________________________________________________Team C

3.2 page 19 The majority of IBM’s revenue..excluding the company’s original equipment manufacturer (OEM) technology business, occurs in industries that are broadly grouped into six sectors: 1. Financial Financial Servic Services: es: Banking Banking,, Financial Financial Markets Markets,, Insurance Insurance 2. Public: Public: Educati Education, on, Governme Government, nt, Health Healthcare, care, Life Sciences Sciences 3. Industrial Industrial:: Aerospace Aerospace and and Defense, Defense, Automo Automotive, tive, Chemical Chemical and and Petroleum, Electronics 4. Distributi Distribution: on: Consumer Consumer Products, Products, Retail Retail,, Travel and and Transportat Transportation ion 5. Communicat Communications: ions: Telecommuni Telecommunicatio cations, ns, Media Media and Enterta Entertainment inment,, Energy and Utilities 6. Small and Medium Medium Busines Business: s: Mainly Mainly companie companies s with with less than 1,000 employees

40

IBM____________________________________________________________________Team C

INTERVIEWS

Zaken doen met Rusland – Interview met Umair Cheema Interview 1 In welke branche zit je? •

ICT, webdeveloper.

Wat heeft je doen besluiten om naar India of Rusland of China te gaan met je werk/studie? •

Ik ben geboren in India, heb vervolgens mijn studie in Australië afgerond en ben weer terug gegaan naar  India om te werken. Tijdens het zaken doen Heb je verschillen in het doen van zaken gemerkt?

•

In India gaat het om persoonlijke contacten, familie en kennissen gaan altijd voor handelspartners. Deze contacten worden meestal gelegd tijdens zakenbezoeken thuis. Meestal eten de zakenpartners dan samen, de vrouw kookt. Welke verschillen heb je gemerkt?

•

In India zijn mensen vaak te laat en het opnemen van een telefoon tijdens een gesprek is niet vreemd. Was dat prettig of niet?

•

Ik ben niet beter gewend, maar ik denk dat op tijd komen en niet telefoneren tijdens het zaken doen wel bevordelijk zouden zijn voor het gesprek.

Hoe ben je met de verschillen omgegaan? •

Als je in India aan het werk wilt kun je niet veel anders doen dan erin meegaan. Daarnaast zijn er ook genoeg internationale bedrijven die opereren vanuit India. Bij deze bedrijven kun je vaak werken onder de normen en waarden van internationale bedrijven, wel tegen een indiaas loon. Cultuurverschillen t.o.v. Australië Welke verschillen heb je gemerkt tussen de Australische en de Indiaase cultuur?

•

De manier van groeten, dit kun je doen door een hand te geven (je rechterhand, links is onrein), in India is het gebruikelijk om je handen gestrekt met de palmen tegen elkaar aan naar het voorhoofd te brengen.

41

IBM____________________________________________________________________Team C Als je ergens niet tevreden mee bent is het niet de bedoeling je stem te verheffen, dit is onbeleefd, je vraagt naar een hoger persoon. Het woord 'ja' wordt niet aangeduid door te knikken, maar door de kin snel heen en weer te bewegen. Dit is verwarrend want in Australië betekend dit ‘nee’. Afdingen is India ook een normaal verschijnsel en zeker als je een buitenlander bent moet je dit doen, anders word je opgelicht. Was dat prettig of niet? •

Voor mij is dit geen probleem, ik kan snappen dat dit voor buitenlanders apart kan overkomen en moeilijk is om aan te wennen. Hoe ben je daarmee om gegaan?

•

Zoals hierboven, ik ben eraan gewend. Wat was de eerste stap die je nam toen je besloot om naar India te gaan?

•

Ik kwam uit India dus bij mij was de beslissing, wat was mijn eerste stap toen ik b esloot terug te gaan. Ik ben begonnen met het zoeken naar een baan bij een internationaal bedrijf. Ik wilde kansen buiten India voor mij open laten staan, een internationaal bedrijf kan dit bieden. Had je al kennissen ter plaatse of kennissen die ervaring hadden met India?

•

Ja, zowieso mijn familie, maar ik heb zelf natuurlijk ook in India gewoond. Hoe ben je te werk gegaan bij het starten in India?

•

Kwam u direct bij de juiste persoon •

Ja

Ontwikkelingen binnen het land. Wat merkte je van ontwikkelingen in het land? •

De ontwikkelingen in India gaan heel snel, het is één van d e meest groeiende landen in de wereld. Zeker  in de ICT sector is dit te merken, zoeken naar een baan is niet meer nodig, als ze weten dat je uit de ICT komt dan bieden ze je allemaal banen aan. Daarnaast zie je dat het land welvarender word en dat ze dingen proberen te verwesteren. Hoe is het straatbeeld?

42

IBM____________________________________________________________________Team C •

Het is ontzettend druk, de straten staan vol met driewielers d riewielers (tuk-tuk’s), (tuk-tuk’s), scooters, fietsen en massa’s mensen. New Delhi is een van de meest westerse steden, maar er zijn nog steeds erg veel marktjes en armoede wijken.

In welk deel van het land? •

New Delhi Ben je ook in andere delen van het land geweest?

•

Ik heb ook nog familie wonen in Bombay en Calcutta en Bangalore, daar kom ik regelmatig. Zijn er onderlinge cultuurverschillen te benoemen? Zo ja, welke?

•

Er worden verschillende lokale talen gesproken en in per staat is er verschil in grootste religies. Voor de rest verschillen Noord en Zuid India in gewoontes bijvoorbeeld muziek, eten en dans. Problemen Werden gemaakte beloftes door de Indiërs nagekomen?

•

Beloftes worden altijd nagekomen, de vraag is alleen; wanneer? Zijn er trends opgevallen waar een IT bedrijf op zou kunnen inspelen?

•

De IT groeit op dit moment heel snel en er zijn veel kansen te bemerken, je kunt het best inspelen op de sectoren die IT nodig hebben en op dit moment de grootste groei doormaken en dus ook vragen naar IT hulp. Zijn er gebreken die op korte termijn opgelost lijken te kunnen worden? Welke?

•

Mensen komen vaak tekort in educatie, interne opleidingen zouden hierbij helpen.

Heb je een leuke (typerende) anekdote van het zakendoen in of met India? •

Wil je ze blij maken breng zelfgemaakte curry mee!

43

IBM____________________________________________________________________Team C

Zaken doen met Rusland – Interview met Odeon Klein Interview 2

In welke branche zit je? •

In de bouw, architectuur.

Wat heeft je doen besluiten om naar India of Rusland of China te gaan met je werk/studie? •

Rusland is niet het gemiddelde Europese land, bij mijn beroep vind ik het vooral heel belangrijk dat je je thuis voelt in de kenmerkende architectuur van het land waarvoor je werkt. Ik vond de bestaande Russiche architectuur inspirerend, daarnaast denk ik dat er  kansen liggen voor de nieuwe architectuur.

Heb je van tevoren research gedaan naar de onderhandelingscultuur van Rusland? •

Rusland heeft mij altijd al gefascineerd, ik kende de mentaliteit van de Russen maar ik heb niet perse onderzoek gedaan naar de onderhandelingscultuur.

Heb je van tevoren research gedaan naar de plaatselijke gebruiken in het zakendoen en het dagelijks leven? •

Ik ben daar niet naar gaan zoeken, ik heb al regelmatig tripjes gemaakt naar Rusland en heb de plaatselijke gebruiken dus al voor grotendeels opgepikt.

Heb je verschillen in het doen van zaken gemerkt? •

Als je binnenkomt verwelkomen ze je op een zakelijke manier en vanaf dat moment blijven ze gefocust op het uiteindelijke doel van het gesprek. Een gezellig praatje praatje gebeurd meestal pas achteraf en soms helemaal niet.

Welke verschillen heb je gemerkt? •

zie hierboven 44

IBM____________________________________________________________________Team C

Was dat prettig of niet? •

De eerste keer voelde ik mij niet om mijn gemak, naarmate je vaker zulke gesprekken hebt wen je eraan. Inmiddels vind ik het een fijne manier van handelen, het is een manier  waarmee je snel tot een overeenkomst komt.

Hoe ben je met de verschillen omgegaan? •

Je kunt niet veel anders dan het te accepteren. Het is een kwestie van zoeken naar het bedrijf dat het beste voldoet aan je eisen en daarmee moet je dan proberen te blijven werken. Het probleem is echter dat deze bedrijven dan een hogere vergoeding gaan vragen omdat ze weten dat ze belangrijk voor je zijn. Verder is het zaak dat je de bestelde goederen goed controleert bij ontvangst zodat je gelijk kunt aangeven waar je eventueel nog niet tevreden over bent.

Cultuurverschillen t.o.v. Nederland

Welke verschillen heb je gemerkt tussen de NL cultuur en de russische cultuur?

•

De russen zijn extreem beleefd. Hoewel we in Nederland ook wel beleefd zijn, is dit in Rusalnd toch heel anders. Er word altijd op alles dankuwel en excuseer mij gezegd. Verder zijn het over het algemeen vrij rustige, onopvallende mensen. Niet erg extravert. Wel zijn de Russen heel lichamelijk. Ze knuffelen elkaar veel en raken elkaar aan, aaien kinderen over hun bol, zonder dat men elkaar moet kennen.

Was dat prettig of niet?

•

Het eerste gedeelte niet, omdat ik bang was dat ik het niet deed en mensen mij dus onbeleefd vonden. Maar daar ben ik inmiddels helemaal aan gewend en het gaat nu vanzelf. Het tweede

Hoe ben je daarmee om gegaan? •

Ik heb het op een afstandje aangekeken en probeerde mij aan te passen. Het is voor mij nu een heel normale zaak. Hoewel de verschillen natuurlijk ook niet zeer drastisch zijn. 45

IBM____________________________________________________________________Team C

Wat was de eerste stap die je nam toen je besloot om naar Rusland te gaan?

•

Het zoeken naar een woonruimte.

Had je al kennissen ter plaatse of kennissen die ervaring hadden met Rusland?

•

Ja

Hoe ben je te werk gegaan bij het starten in Rusland? •

Ik ben gegaan, omdat ik het tijd vond om eens voor een totaal andere weg te kiezen. Daarnaast trok Rusland mij enorm aan. Zeker voor mij vak. Ik heb thuis niet veel voorbereiding gedaan. Ik wilde ter plaatse kijken wat mijn wegen waren. Ga graag op avontuur af.

Ontwikkelingen binnen het land. Wat merkte je van ontwikkelingen in het land? •

Van ontwikkelingen binnen het land zelf heb ik niet veel meegemaakt op het moment dat ik in Rusland kwam.

Hoe is het straatbeeld? •

Rusland is een prachtig land met erg mooie gebouwen. Zeker in een stad als Moskou.

Ben je ook in andere delen van het land geweest?

•

Nog niet. Ben ik wel van plan.

46

IBM____________________________________________________________________Team C

Zijn er onderlinge cultuurverschillen te benoemen? Zo ja, welke?

•

Nee, niet dat mij al is opgevallen. Maar ik heb natuurlijk ook maar een klein gedeelte van Rusalnd gezien.

Problemen

Werden gemaakte beloftes door de Chinezen nagekomen?

•

Ja, wel moet je opassen dat de Russen van je onwetenheid profiteren als ‘buitenlander’.

Zijn er trends opgevallen waar een IT bedrijf op zou kunnen inspelen? •

Nee.

Zijn er gebreken die op korte termijn opgelost lijken te kunnen worden? Welke?

•

Nee, niet dat mij is opgevallen.

Heb je een leuke (typerende) anekdote van het zakendoen in of met Rusland?

•

Rusland is een prachtig land voor het doen van zaken. Zeker als je de omgang van de Russen wat beter kent, kunnen daar mooie kansen uit voortvloeien.

47

IBM____________________________________________________________________Team C

Interview: Bart Ankoné (3com) Welke branche?

In welke branche bent u werkzaam? Nu en toen u voor het eerst naar China of India ging. Wat heeft u doen besluiten om naar India of China te gaan met uw werk? Mij naam is Bart Ankone en ik ben al 25 jaar werkzaam in de ICT branche, 15 jaar geleden heb ik 5 jaar gewerkt voor Acer Computer, een van de grootste Taiwanese computer bedrijven en sinds 3 jaar ben ik werkzaam voor 3Com, een van de grotere Amerikaanse/Chinese netwerkbedrijven. •

•

Daar onze afdeling R&D en de fabriek in China zit kom ik daar zeer regelmatig, voor 2.5 jaar terug heb ik daar ook ongeveer een half jaar gewoond.

Van tevoren research gedaan naar de onderhandelingscultuur van China/India?

Heeft u van tevoren research gedaan naar de plaatselijke gebruiken in het zakendoen en het dagelijks leven? Dat heb ik inderdaad gedaan middels de Kamer van Koophandel, maar ook vanuit 3Com werd hier ruimschoots voldoende voorlichting aan gegeven. Diverse Cross Cultural courses, ook intern, heb ik hiervoor gevolgd. •

Tijdens het zaken: Verschillen in het doen v an zaken gemerkt?

Welke verschillen heeft u gemerkt? Als je met Chinezen duidelijke afspraken maakt en deze ook bevestigt en ook nakomt dan is er  niets aan de hand. •

Was dit prettig of niet? Dit is zeer prettig want daardoor is het makkelijk om te plannen en deze ook na te leven •

48

IBM____________________________________________________________________Team C Hoe bent u daarmee om gegaan? In principe goed. In het begin ben je af te toe wat ongeduldig ongeduldig •

Cultuurverschillen Cultuur verschillen t.o.v. Nederland

Welke verschillen heeft u gemerkt? Geloof, het voedsel, de emancipatie, vrouwen zijn ondergeschikt, wij vinden hun stinken en zij ons •

Was dat prettig of niet? Als je open staat voor andere culturen dan is het prettig en als men elkaar respecteert dan komt het goed. •

Hoe bent u daarmee om gegaan? Goed , anders moet je daar niet naar toegaan, erg e rg interessant om de beperkingen van elkaars cultuur te mogen bemerken •

Wat was de eerste stap die u nam toen u zaken wilde gaan doen in China en India? •

Mijzelf inlezen, mailen en bellen met collega´s die daar of woonden of al geweest waren.

Had u al kennissen ter plaatse of k ennissen die ervaring hadden met deze landen? •

Wij hebben in China ongeveer 2700 mensen werken, waarvan er een 80% Chinezen zijn, de andere 20% is een soort melting pot vanuit de hele wereld. Dus ik kende al een 100 tal mensen redelijk en een 20 tal goed.

Kwam u direct bij de juiste persoon? •

Absoluut, dit werd vanuit het bedrijf goed begeleid en geregeld en zelfs bij de lokalen thuis, dat is het voordeel als je voor hetzelfde bedrijf werkt.

Ontwikkelingen binnen het land. Wat merkte hij/zij ervan?

Hoe is het straatbeeld? Zeer druk, veel mensen, zeer schoon. •

In welk land en welk deel van het land? Voornamelijk in en om Beijing •

Bent u ook in andere delen van het land geweest? Zeker, dit waren er meer privé tripjes, omdat het zakelijke zit toch voornamelijk in Being afspeelde. De muur was zeer indrukwekkend. •

Zijn er onderlinge cultuurverschillen te benoemen? Zo ja, welke? Niet echt gemerkt, je hoort wel de mensen toch een ander dialect spreken •

Welke problemen bent u tegen gekomen

Toch duidelijke taal en communicatie problemen, het is altijd moeilijker daar om mensen te doorgronden, hun gevoel voor humor is beduidend anders. Werden de beloftes nagekomen?

49

IBM____________________________________________________________________Team C

•

Beloftes werden zeker nagekomen, wat er helpt is om de afspraken per mail of schriftelijk te bevestigen en ook daar weer op hun akkoord te vragen. Dan komt men hun afspraken na.

Zijn er trends opgevallen waar een IT bedrijf op zou kunnen inspelen? •

Men ziet dat niet alleen de assemblage en de productie zich afspeelt in China,Japan en Taiwan maar dat steeds meer ICT bedrijven ook hun afdelingen R&D en Support verplaatsen naar deze landen. De loonkosten zijn hier vele malen lager, het eigen achterland is een enorm afzet gebied en de technologisch kennis wordt steeds hoger.

Zijn er gebreken binnen het land/branche die op korte termijn opgelost lijken te kunnen worden? Welke? •

Geen idee. Geen antwoord op

Heeft u een leuke (typerende) anekdote van het zakendoen in of met India en China?

Als wij hier in EMEA of in de States iemand willen ontslaan dan moet je dat goed voorbereiden, cases bouwen etc. In bijvoorbeeld China en Japan is het voldoende om 2 dagen niet tegen die persoon te praten die daar dan zelf de consequentie aan verbindt.

50

IBM____________________________________________________________________Team C Zaken doen met China – Interview met Duoli Chen •

Ben je bekend met zaken doen met China?

Ik zelf heb (nog) geen zaken gedaan met China. Mijn zus heeft een Nederlands bedrijf dat werkt met  China en mijn nicht heeft in China een bedrijf dat internationaal opereert. •

In welke branche zijn zij werkzaam?

In de textiel en in de kunst. •

Wat heeft hen doen besluiten om naar China te gaan met uw werk?

China is booming. Alles en iedereen gaat nu die kant op vanwege de explosieve economie. Als je nu niet  meegaat mis je misschien de boot. Daarbij komt dat wij Chinees zijn en de taal spreken, dat brengt voor  ons voordelen met zich mee. •

Hebben zij van tevoren research gedaan naar de onderhandelingscultuur onderhandelingscultuur van China?

Ja, zeker. De handelscultuur verschilt veel met die in europa. •

Is er van tevoren research gedaan naar de plaatselijke gebruiken in het zakendoen en het dagelijks leven?

Chinezen hebben de gewoonte om zaken te doen tijdens thee drinken of tijdens eten. Men neemt graag  risico en is niet zo terughoudend als Europeanen. •

Wat zijn verder typische verschillen in het zakendoen?

Chinezen zeggen sneller “ja”. Zij willen snel actie, snel geld, en daardoor lopen zij natuurlijk grotere risico’s. Wij in Europa zijn geneigd een analyse te maken van de markt. We maken berekeningen om te kijken of een bepaalde beslissing rendabel is of niet, en hoe groot het risico is voor jezelf. •

Zijn die verschillen prettig of juist niet?

Het is anders, er wordt van je verwacht gelijk een beslissing te nemen, terwijl je misschien eerst moet  overleggen met een 2 de persoon. Maar ik denk dat men na een tijdje wel gewend is aan de handelscultuur  van chinezen.

Cultuurverschillen t.o.v. Nederland Cultuurverschillen Welke verschillen zijn er tussen de Chinese en de Nederlandse cultuur? •

Men is erg beleefd. Zaken doen gebeurt tijdens eten/thee drinken. Men hecht veel waarde aan vriendschap. Een vriend die meer geld vraagt voor een bepaald product krijgt de vo orkeur boven een vreemde die het goedkoper kan leveren. •

Hoe kijk je daar zelf tegenaan?

Het is wennen in het begin, maar als je paar keer zaken heb gedaan is het vanzelfsprekender en kan je er  gemakkelijker in mee gaan.

•

Hoe zijn je zus en nicht daarmee om gegaan?

51

IBM____________________________________________________________________Team C Gewoon doen; Men heeft altijd twijfels, twijfels over de verschillen, over de taalbarriere en d ergelijke. Maar het is goed om buiten je eigen gebied te kijken naar andere mogelijkheden.

•

Wat was de eerste stap die zij namen toen ze zaken wilden gaan doen met en vanuit China?

Eerst bepalen wat je echt wilt en van daaruit verder kijken. Er zijn zoveel mogelijkheden in Azië, als je niet  van te voren bepaalt wat je precies wilt, dan raak je helemaal zoek. Dus eerst doel bepalen, wat wil je  precies, bv. Wat voor product/dienst, kwaliteit/prijs. •

Waren er al kennissen ter plaatse of kennissen die ervaring hadden met deze landen?

Ja, ik heb familie daar wonen, die ook met het buitenland zaken doen. •

Hoe zijn ze te werk gegaan bij het starten in en vanuit China?

Er zijn in china veel beurzen waar zakenlieden bijelkaar komen. Op de beurs worden allerlei soorten nieuwe producten getoond. Men kan daar naartoe gaan en een beetje verkennen. Kijken of het aansluit  bij de markt in het thuisland aansluit. •

Is het gemakkelijk om direct bij de juiste persoon te komen voor zaken?

Nee, het is vaak trial & error, dus je moet doorzettingsvermogen hebben. Je bent nooit gelij k bij het juiste adres. Ontwikkelingen binnen het land. Hoe is het straatbeeld? •

Erg modern, er zijn veel mensen. De grote steden zijn gemiddeld moderner dan de steden in Europa. Er  zijn bijvoorbeeld veel hoge gebouwen en drukte op straat. •

In welk deel van het land is dat?

Het zuiden, vooral vlakbij de zee. Ben je ook in andere delen van het land geweest? Ja, ik ben ook naar Beijing geweest. •

•

Zijn er onderlinge cultuurverschillen te benoemen? Zo ja, welke?

Men heeft in het zuiden een ander dialect dan in Beijing. Eet gewoonten verschillen ook tussen noord/zuid. •

Welke problemen kwam je tegen tussen de culturen?

Onderling bedoel je? Daar zijn geen noemenswaardige verschillen. Een grote stad is toch een grote stad. •

Worden de beloftes nagekomen?

in mijn eigen ervaring moet je goed kijken naar de producent/leverancier. In china is het gemakkelijk  zaken doen, maar vaak krijg je geen waar voor je geld. Je moet kritisch kijken naar de persoon met wie je zaken doet. En ga niet te snel in zee met diegene, maar kijk goed rond. Er zijn vaak duizenden concurrenten die misschien net zo goed zijn, maar dan goedkoper. •

Zijn er trends opgevallen waar een IT bedrijf op zou kunnen inspelen?

52

IBM____________________________________________________________________Team C

China is in mijn ogen op IT gebied voorbijgestreven aan Europa. Alle hi-tech spullen komen daar eerst uit  en daarna pas in Nederland.

•

Zijn er gebreken die op korte termijn opgelost lijken te kunnen worden? Welke?

Er zijn veel grote bedrijven in China, maar ook veel amateurs die het grote geld willen verdienen. Soms gaan de zaken dus erg amateuristisch. Ik denk dat dit gaat veranderen binnen een korte tijd. Europese bedrijven zijn nou eenmaal professioneler en zullen dat ook overbrengen op de chinezen. Die leren graag. •

Heb je een leuke (typerende) anekdote van het zakendoen in of met China?

Nee, er schiet me niets te binnen. b innen.

53

IBM____________________________________________________________________Team C

Zaken doen met China – Interview met Dolon Aalbers Branche / research In welke branche zit je? •

Evenementen branche

Wat heeft je doen besluiten om naar India of China te gaan met je werk/studie? •

Het is algemeen bekend dat China een sterk opkomende economie is waar veel kansen liggen. Deze kansen wilde ik graag met eigen ogen aanschouwen om eventueel in de toekomst zelf iets te beginnen. Ik had al wat contacten in Shanghai en toen die mij de kans boden om stage te komen lopen was de keuze snel gemaakt.

Heb je van tevoren research gedaan naar de onderhand onderhandelingscultu elingscultuur ur van China? •

Ik had al wel het één en ander gehoord van de mensen die ik in Shanghai ken, maar ik ben niet proactief op onderzoek uit gegaan.

Heb je van tevoren research gedaan naar de plaatselijke gebruiken in het zakendoen en het dagelijks leven? •

Idem

Tijdens het zaken doen Heb je verschillen in het doen van zaken gemerkt? •

Het is veel moeilijker. Met name als er goederen moeten worden geproduceerd. Als je een bedrijf  (of je eigen werknemers) vraagt iets te maken dan wordt het steevast verkeerd gedaan. Zelfs als  je specifieke instructies hebt gegeven komen ze uiteindelijk aan met een goedkopere variant. Uiteindelijk krijg krijg je het product dan ook o ok een stuk goedkoper dan in eerste instantie is afgesproken, maar het is erg lastig om te krijgen waar je om vraagt.

Welke verschillen heb je gemerkt? •

zie hierboven

Was dat prettig of niet? •

Nee, integendeel

Hoe ben je met de verschillen omgegaan? •

Je kunt niet veel anders dan het te accepteren. Het is een kwestie van zoeken naar het bedrijf dat het beste voldoet aan je eisen en daarmee moet je dan proberen te blijven werken. Het probleem is echter dat deze bedrijven dan een hogere vergoeding gaan vragen omdat ze weten dat ze belangrijk voor je zijn. Verder is het zaak dat je de bestelde goederen g oed controleert bij ontvangst zodat je gelijk kunt aangeven waar je eventueel nog niet tevreden over bent.

Cultuurverschillen t.o.v. Nederland Cultuurverschillen Welke verschillen heb je gemerkt tussen de NL cultuur en de Chinese cultuur? Het meest opvallende op straat is dat Chinezen, vooral in de steden, continu aan het roggelen zijn. Zowel mannen als vrouwen staan eerst seconden lang te gorgelen en laten dan dikke groene fluimen achter. Kinderen poepen ook nog wel eens gewoon op straat terwijl hun ouders hen daarbij helpen. Dat zijn de meest schrikbarende verschillen. Het laatste schijnt overigens al wel een stuk minder te zijn dan een aantal jaren geleden. Verder moet je op veel producten afdingen om ze voor een mooi prijsje mee te krijgen. Dit vind ik op zich wel leuk zolang je een klein beetje een idee hebt wat je ergens voor moet betalen. •

Was dat prettig of niet? •

Het eerste gedeelte niet, het tweede wel

54

IBM____________________________________________________________________Team C Hoe ben je daarmee om gegaan? •

Aan roggelende en poepende mensen op straat doe je niets, maar je raakt er wel min of meer aan gewend. Het afdingen leer je vanzelf. Het is daarbij uiteraard wel handig om je af en toe een beetje te laten informeren door bekenden.

Wat was de eerste stap die je nam toen je besloot om naar China te gaan? •

Het regelen van een goede reisverzekering.

Had je al kennissen ter plaatse of k ennissen die ervaring hadden met China? •

Ja

Hoe ben je te werk gegaan bij het starten in China? •

Eigenlijk werd het grootste deel van het opstartwerk verricht door de mensen die ik al in Shanghai kende. Zij hebben huisvesting en werk geregeld en ik kon gelijk aan de slag. Om ook sociaal een leuk leven daar te krijgen ben ik mee gaan sporten met mijn baas (een Fransman) en later ook met Nederlanders die al lang in Shanghai wonen. Het ging allemaal vrij snel!

Kwam u direct bij de juiste persoon •

Nee, via mijn kennissen in Shanghai. Het schijnt wel erg moeilijk te zijn om zelf vanuit het buitenland, werk te vinden in Shanghai overigens!

Ontwikkelingen binnen het land. Wat merkte je van ontwikkelingen in het land? •

Het bouwen van gebouwen en vooral wegen gaat erg snel in de steden. Ook zie je dat jonge mensen een stuk ontwikkelder zijn dan ouderen. Aan ouderen zie je vaak dat ze zwaar fysiek werk hebben gedaan en ze spreken geen woord Engels terwijl veel jongeren wel redelijk geschoold zijn in Engels en soms ook Frans.

Hoe is het straatbeeld? •

Het grootste deel van Shanghai is erg modern en oogt n et als grote westerse steden. Er zijn echter ook nog wel krotten zo hier en daar. daa r. Het is verder erg druk op straat. Fietsen, brommers en taxi’s domineren het straatbeeld.

In welk deel van het land? •

Shanghai(Oost kust)

Ben je ook in andere delen van het land geweest? •

Beijing, Suzhou en Hainan

Zijn er onderlinge cultuurverschillen te benoemen? Zo ja, welke? •

In het westen van China is de bevolking overwegend moslim terwijl het oosten meer naar  boeddhisme nijgt. Verder is het in het zuiden een stuk warmer dan in het noorden waardoor er  andere gewassen worden verbouwd. Hetzelfde geldt voor oost en west. In het oosten wordt namelijk veel handel gedreven en zijn de mensen relatief ontwikkeld terwijl het leven in het midden en westen van China vooral bestaat uit landbouw. De mensen zijn hier veel armer en doen veel meer fysiek werk.

Problemen Werden gemaakte beloftes door de Chinezen nagekomen? •

Zoals ik eerder al antwoordde op de vraag: ´ Heb je verschillen in het doen van zaken gemerkt?´ doen Chinezen een hoop beloftes, maar vaak komen zij deze n iet (in één keer) na.

Zijn er trends opgevallen waar een IT bedrijf op zou kunnen inspelen? •

Nee niet speciaal

55

IBM____________________________________________________________________Team C Zijn er gebreken die op korte termijn opgelost lijken te kunnen worden? Welke? •

Heel erg veel, teveel om op te noemen eigenlijk.

Heb je een leuke (typerende) anekdote van het zakendoen in of met China? •

China is een geweldig land met enorm veel kansen. Het is alleen jammer dat de Chinezen zelf  nog zo onderontwikkeld zijn

56