Step 3. Final PresentationCase Study on Sino-Finnish Joint Venture
Shanghai Fimet Medical Instrument
Nina KOSTAMO (Finland), Phuong TRAN (Vietnam) & Lu ZHOU (China)
CERAM Sophia AntipolisApril 2006
Agenda
1. Overview of Finnish Investments and JVs in China
2. Recap on Previous Presentations
3. New Results from China
4. Wrapping up the Interview Results
5. Fimet Shanghai: Exogamic Nature of JV
6. Fimet Shanghai: Alliance Concept
7. Fimet Shanghai: Co-operation Lifecycle
8. Conclusion
Finnish Investments and JVs in China
200 Finnish firms in China Total turnover of €10 billion 30,000 employees Majority are representative offices Over 60 firms have manufacturing plants The biggest investor is Nokia (8 JVs) 10 new firms enter the market annually Total investments accounted for €5 billion in 2005
Source: Finpro 2005
Sino-Finnish JVs: Lessons learned and recommendations In Chinese market, Finnish SMEs operate as succesfully
as large firms In order to success, there is a need for:
Clear strategical choices Careful planning Good selection of personnel Sufficient resouces Long-term thinking Patience Decisiveness to earn
Recap: Overview of Shanghai Fimet
4 parties
Finnfund
50 % - 50% Sino-Finnish Equity Joint Venture
Shanghai Fimet Medical Instrument in 1994
Recap: Conducted Interviews
1. Matti Kerppola, ManagerFinnfund, Helsinki, Finland
An hour-long, face-to-face interview with semi-structured questions
2. Gang Chen, ManagerDepartment of Marketing Shanghai Fimet Medical Instrument Co., Ltd, China
An hour-long telephone conversation with semi-structured questions
Key Results: Interview with Mr. Chen
Goals: To replace import of similar product range Introduce new and advanced technology
Expectation:JV for another 14 years Resources pooled: Funding, distribution channels, working staff and Guanxi
Risks and challenges
Differentiation: Good cooperation Proper routines Well performed operations Mutual respect
Lesson learned: Cultural respectStaff training in Finland
Difficulties: Technical dependency uponforeign partnerFierce competition fromChinese counterparts
Conclusions based on the Interviews
Different resources pooled in Respective goals Decision power Concern on technological and knowledge spill-over Pressure upon entry into WTO Trustworthy partnership
Environmental setting
•Business
•Customers
•Suppliers
•Countries covered
Company’s profiles
•Type of ownership
•Age
•Size
•Culture
•Competencies
•Technology profile
•Range of product
•Production capabilities
Type of resources
Type of objectives
Related Unrelated
Exogamic Nature of Shanghai Fimet
Alliance Concept in Shanghai Fimet
SHANGHAI MEDICAL INSTRUMENTS
Sitra Finnfund
FIMET
Joint Control
Capturing Chinese market:Being the leader in
dental equipment market
Resources-Regulation & administration support-Funding
Know-how in-Manufacturing -Product tech-Process tech-Research equip-Skills in mngt-Brand
Access to-Local market-Labor market-Local suppliers-Utilities-Distribution-Guan Xi
ResourcesAdvanced technologyWorld class brand name
Environmentalconditions
Company’sresource
profile
Advantagesto cooperate
Decision to cooperate
Pre-alliance processes
Implemen- tation
Split
Choice of a cooperative manoeuvre
List of targeted resources
Test of apptitude
to collaborate
Identification of potential
partners
Opportu-nities for
cooperation
Mgt of coopera-
tion
Confirgu-ration of the
alliance
Post-mortem
Getting out of
cooperationRisks and costsof cooperation
Top managementvalues Relaunch of search process Feedback
Cooperation Life-Cycle of Shanghai Fimet
2020199419931992
Conclusions
Fimet Shanghai is a good example of successful small size Sino-Finnish joint venture
Despite the big changes in the Chinese market and intense competition, the EJV has been probitable the last 11 years.
Clear operation, opportunity to learn from each other, ability to overcome the cultural issues and common objectives with win-win approach has enabled Fimet Shangai to succeed.
Sources
Course material
Fimet. www.fimet.fi & www.fimet.com/cn
Finpro 2005. Country report China. www.finpro.fi
Kaislaniemi, I. 2003. Finnish Silk Road – Experiences of Finnish
Enterprises in China. Sitra-Tekes-Finpro.
Vihakara, A. 2006. Patience and Understanding. A Narrative Approach
to Managerial Communication in a Sino-Finnish Joint Venture. Turku
School of Economics and Business Administration.
Thank you! Kiitos! Xie Xie!
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