Closing out 2018 in studio for the CBC News Network Weekend Business Panel, alongside Elmer Kim and John Northcott. This week, we focused on the business implications of the ongoing Huawei saga, which became part of the news cycle earlier this month with the detaining of the company’s CFO, Meng Wanzhou.
This situation could also bring complications to the current 90 day “quiet period” between China and the US, in an attempt to arrive at a trade agreement that could bring more favourable terms than the recent past of escalating tariffs and other troubles. While the two largest economies in the world seem poised for an uncertain relationship, with Canada facing warring words of its own from China, the news isn’t all bad. In the event that China cannot come to a reasonable trade resolution with the US, it will have to continue to procure goods to support its own economy, with a need to look beyond its regular trading partners.
Here are some things that Canadian companies should think about, in terms of balancing the opportunity and risk associated with the Chinese (or any new) market:
- Bring a balanced approach. When seeking to do business in new markets, it is critical to fully understand the marketplace, in terms of potential opportunities, risks, regulations, and business practices. Too often, the focus is primarily on the opportunity, which could result in significant challenges when inevitable difficulties surface.
- Take a long term perspective. Entering new markets should be viewed as an investment, not a whim. Investments require the right research, strategy, and implementation plan, not only to generate success, but also to address challenges and mitigate risk. Although this might sound obvious, companies tend to fall into the trap of focusing primarily on generating short term, positive results, an approach that puts an investment at risk once early days pass.
- Conduct an integrity check. Among the important issues of opportunity and risk is the manner in which business is done; call it values, basis of judgement, operating style. The bottom line is that not everyone (or every place) has a style that is consistent with your own, which could lead to significant problems down the road. Knowledge is key to determining whether or not the opportunity at hand is a place where you want to be, and finding this out after the fact could be too late.
Increase the likelihood of success by resisting the temptation to leap without looking, and instead, doing the necessary homework to make an informed decision and strategize accordingly. There’s strength in recognizing that those who are first out of the gate aren’t always in the race for the long run; be sure to avoid this all too common pitfall.
Thanks for watching and see you in 2019!