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POLI/ASIA 347: Urban Lab Shanghai
The student blog for Rice University's Urban Lab in Shanghai.
 

Posts Tagged ‘Company’


Day 6 – Technology in Shanghai

March 15th, 2014 by mjr8

On the sixth day of the trip we had visited a textile company that goes by the name of Jaros. Jaros is a company that is like no other. First and foremost, their “management model” is based off of Buddhist teachings. They believe that acting in this way will result in a successful company. Here are some of the methods:

  • Respect everybody
  • Praise good deeds
  • Correct mistakes
  • Be happy for someone else
  • Help others reach their goals
  • Spread good teachings to others
  • Follow these teachings
  • Respect diversity
  • Make everyone benefit from good deeds

Their aim is to make a business that has a great environment for their workers, a place where people can express themselves and grow as people. It seems to work because they sell products to England, the U.S., Bangladesh, Pakistan, and a handful of other countries. They have over 400 patents and over 50 key products in China. They even got 2nd place in China’s competition for technological innovation. Most of this success has come from the management of the business itself, but it is also because of the central government’s involvement.

The government’s “Commission of Development and Reform” directly supports businesses such as Jaros. The “Commission for Economic Information” even provides informational support to companies like this to help them out with logistics, etc. If they meet goals set by the government, they also get preferential treatment in the form of lower taxes and other credits. The business environment in China seems to be much different than the environment here in the United States. Here in the United States most businesses operate on their own and don’t get direct government help. Sure their are downsides to China’s model and the United State’s model, but I would think that if businesses in the U.S. got more assistance then there would definitely be more results to show for.

I was curious as to how this company was so successful in driving out all foreign competition in China and how they are able to sell to many different countries around the world. I got a simple answer from them. The biggest factor would be the price of the products. The pricing is, on average, 1/5 times cheaper than products made in the Netherlands and United States. The catch is that the quality is comparable to the quality from other Western companies. This strategy, I was told, has been a large contributor to their success overseas. They also have a policy where they will help build their products in the consumer’s country to lower the manufacturing price for their company. This is called localized production. Other factors include:

  • Joining the WTO
  • Lower labour prices
  • Cheaper materials

I find it interesting how some companies in China operate. Not only do they get direct help from the government because of the government realizing the potential gain from doing so, but they are focused on competitiveness. They aren’t trying to outsource their work or create a bad environment for their workers in search of profit. They have taken an approach that I think many of our businesses in the United States should be emulating and that is to encourage innovation and create better business environments by means of government action.

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E-Commerce in Shanghai

March 7th, 2014 by efd1

Today was an incredibly interesting day. We visited the company Eastday, which is a major internet company in Shanghai. The company began as a media company, but with the rise of the internet, transitioned into e-commerce. The company seemed similar to Amazon – in addition to selling lots of products online, it also provides cloud servers for other businesses. However, what’s even more interesting is the way the company is expanding. They are promoting a concept they call “O2O”, which means online to offline. The idea is to provide webpages which display information about products to draw people into physical stores. The goods seemed mostly to be luxury goods, like French Wines. The company’s latest division is a physical art store. The gallery has a small tea area, and is decorated with traditional Chinese decorations.

I found the company totally fascinating. In the United States, the trend seems to be away from brick and mortar stores towards e-commerce. Yet, Eastday is actually using revenue from their internet business to expand into brick and mortar stores. Part of the reason this strategy works is because Eastday seems to be providing luxury goods, which the user wants to experience before the buy. This is especially true in art, where the customer can visit the gallery, experience the works of art, and then talk to the curator over a glass of tea. Eastday is able to increase demand for these products by leveraging their huge media presence. Could this model work in the United States? I think the first problem is that the markets Eastday is establishing these stores to create already exist in the United States. Further, it doesn’t seem like there’s a web retailer with the same level of media and commercial presence (perhaps Google or Amazon?) to generate the level of excitement that these stores need to exist profitably. Finally, it seems that most American consumers prefer convenience over experience. Still, the idea is very interesting and I believe that with the right market, O2O could also become an American phenomenon.

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Technological Innovation in China

March 7th, 2014 by efd1

Technological innovation in China often gets a bad rap as being merely derivative. How true are these allegations? Today we had the opportunity to meet with a medium sized chemical company and see Chinese technological innovation at work. The company was especially interesting because of their history. The company was set up in the late 1990’s and located their headquarters and factory in an area which was then outside of Shanghai in order to receive tax incentives from the local government. One of the most interesting aspects of the company was the way the management’s religious beliefs influenced the company. The company actually had a Buddhist sanctuary in the office, complete with a large golden Buddha statue and burning incense.

It was clear that the founder’s religious beliefs played a major role in the management of the company. Beyond the interesting management style, the company clearly had technical skill. The founder was a researcher at a nearby university, and was able to commercialize his research to create products for textile manufacturing which were able to be produced at around 1/5th the cost of competitors. The advantages of the company were the low cost labor combined with the new manufacturing technique. The manager we talked to also mentioned that one of their key advantages was their size. Unlike a large state owned enterprise, they felt nimble enough to engage in further chemical research. On the other hand, their medium size allowed them to maintain a small manufacturing base to actually mass produce their products and a sales force to sell their product to other businesses.

The companies innovation was helped in large part by government “projects” which sounded similar to America’s system of research grants. In China different governmental departments create a list of specific innovations they’re interested in funding. Companies can apply for these grants at any point in their own design process, from an idea to an actual product. The central government then selects companies that it considers meeting its requirements for grants.

The company benefited from the system because they were often able to target their research at these grants, which are released yearly. The innovation system seems well established, and it appears to work well for small companies.

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Day 6: Textile Company

March 6th, 2014 by Tina

Yesterday, we visited a textile company – Zhongda Jaros, to be exact. It was interesting learning about how the central ideas of Buddhism have influenced the company’s philosophy:

–          Respect everybody

–          Give praise when someone does well

–          Correct your mistakes (be self-reflective)

–          Be happy for others

–          Help others to fulfill their wishes

–          Be very diligent about spreading Buddhist thoughts

–          Do as the Buddhist teachings say in your actions

–          Respect diversity

–          Give back with thanks to everybody

The company’s motto is to be appreciative and return what you receive. I really liked this motto, as I think giving back is an important thing to do in life.

From an environmental perspective, the company is taking steps to ensure water safety. We went on a tour of the factory, and we saw the water reserves – there were fish in the man-made body of water.

Some interesting facts about the company:

–          Some of the countries it exports to includes Thailand, Vietnam, Bangladesh, and India.

–          Because of their technology, no foreign technology now enters the area of China that its located in, and the company takes great pride in this.

–          The most famous and comparable company is in Holland.

–          80% of their market share is in the Chinese market.

–          Because it’s a mid-sized company, they can both produce and innovate.

–          They placed 2nd in a national competition for technological innovation last year.

Overall, I would venture to say that the company’s Buddhist philosophy might have influenced its environmental methods with water. I really liked how they blended Buddhist thoughts with their business.

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March 6, 2014 | Day 6 in Shanghai

March 6th, 2014 by hb10

We spent today learning a little about the private sector in Shanghai. We had the opportunity to meet with part of the leadership team of a textiles manufacturing company. The company has a great story– the founder developed technology to improve textiles manufacturing while he was in school and now has a company that sells its products around the world and has twenty offices in China. What I found most interesting about our conversations with the company’s leadership was the influence of Buddhism on their company’s culture and practices. We were told that Buddhism’s philosophies of remaining respectful to all people, sharing in others’ happiness rather than being jealous, and aiming at doing good so that it might benefit others are what drive this company to succeed. As we toured the factory at around 5pm, we noticed that most of the space was empty –our lecturers mentioned that their company allows its employees to leave early in order to high traffic. I was very impressed with the thought and consideration offered to the factory workers in the organization, it was the prefect exemplification of the values they mentioned earlier in the day.

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