Thursday, October 07, 2010

Intel Inside China

Perhaps to some people, China has now developed into a 7-tonne gorilla, able to push its weight around the world at will. Witness how China is 'buying up Greece'. Certainly China has come a long way since opening up to the world in 1978. Many businesses have rushed into this new 'gold-rush' town, and in the process go themselves burnt or bankrupted. I personally know of one which nearly went under due to its venture in China. Yet there are those which tread carefully and came out the better for it. One of these in Intel.

In "Embedded - Intel in China: The Inside Story", Intel China's once-CEO of 12 years standing, Mr Tan Wee Theng, recounts the careful approach Intel took to establish itself in China. This is not a detailed account of the business operations in China, but a broad sketch of the journey that Intel took going into China. The narrative starts with an explanation of why China was important to Intel, and the gradual establishment of sales offices and the marketing and branding campaigns that followed.

Having tested the waters, more developments followed with the establishment of R&D facilities, and eventually the building of Test and Assembly factories in Shanghai and Chengdu. Intel China's ventures culminated with the building of a wafer fabrication plant in Dalian, China, which is situated in the Northeastern part of the country.

This book highlights the key people who played a significant part in the development of Intel in China. And these people were not just the sales and marketing people, but also people with skills that Intel reckoned were important in doing business in China, including an organisational and cross-cultural specialist who helped to 'integrate Intel's values with the local culture'. This book contains personal reflections of many of the key players mentioned in the book - a feature that makes the narrative that much more interesting.

China is still a very structured society, and this carries over into the business and government arena. There remains specific protocols that one has to observe, such as those that deals with seniority. But one important point that Mr Tan made is to give weight to lower level officials because some of them are likely to rise to the highest levels of government one day.

The author covers issues of 'guanxi', corporate social responsibility, intellectual property and the east-west integration issue, amongst others, but from first hand experience - Intel China's experience. While it may not all be applicable to every company that wants to do business in China - remember that Intel itself is a giant in every sense of the word - the various lessons that are drawn provide good points of reference to one and all. Certainly, students of International Business should read this book.

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