domestic companies in china (Full pages) - EIUgraphics.eiu.com/files/ad_pdfs/domcompAppendix.pdf ·...

© The Economist Intelligence Unit 2005 81

Appendix: Survey resultsDomestic companies in China

Taking on the competition

Which is your company's main business?(% respondents)

Entertainment, mediaand publishing 1

IT and technology 5

Manufacturing 22

Retailing 6

Transportation, travel and tourism 3

Agriculture and agribusiness 3

Chemicals 7Consumer goods 7

Energy and natural resources 6

Financial services 7

Healthcare, pharmaceuticals and biotechnology 3

Logistics and distribution 7

Professional services 3

Telecoms 3

Automotive 4

Construction and real estate 10

What is your company's annual revenue? (% respondents)

Rmb100m to Rmb500m29

Rmb10bn to Rmb50bn10

Rmb500m to Rmb1bn13

Rmb1bn to Rmb10bn28

Rmb100m or less 19

More than Rmb50bn1

Appendix: Survey results

Domestic companies in ChinaTaking on the competition

A total of 176 senior executives from domestic companies in China participated in our survey , which was conducted in May and June 2005 . Our thanks to all those who shared their time and insights .

Figures may not add to 100 due to rounding

82 © The Economist Intelligence Unit 2005

Appendix: Survey resultsDomestic companies in ChinaTaking on the competition

What is the size of your company's workforce?(% respondents)

More than 45061

Between 20 and 508

Between 150 and 45015


Less than 204

Which of the following best describes your title?(% respondents)

CIO/Technology director 3

Manager5

Head of business unit1

CEO/President/Managing director 24

Other C-level executive 9

SVP/VP/Director20

Board member 11

CFO/Treasurer/Comptroller 7

Head of department21




1. In any given year, how important to your company are the following indicators to measuring business performance? Rate on a scale of 1 to 5, where 1=Not important and 5=Very important. (% respondents)

1 2 3 4 5

Revenue & revenue growth 1 1 11 27 60

Market share 1 5 10 27 57

Operating profit & growth 2 1 7 19 71

Return on equity 3 2 21 30 44

Return on investment 4 3 16 30 47

Productivity 3 8 19 34 35

Size relative to rivals 5 10 29 32 25

Overseas presence 30 17 20 18 16

2. To what degree are the following factors competitive advantages for your company? Rate on a scale of 1 to 5, where 1=Not at all and 5=A major competitive advantage. (% respondents)

1 2 3 4 5

Operational costs 5 11 28 26 31

Brand 3 6 11 31 49

Government support 11 11 23 30 24

Distribution channels 9 10 27 28 27

Speed to market 1 7 22 32 39

R&D capability 3 11 23 29 34

Supply-chain efficiency 5 8 35 34 19

Effective leadership 1 3 15 36 45

Committed workforce 2 2 19 39 38

3. Where do ideas for strategic initiatives in your firm come from? Select up to three options. (% respondents)

67

66

17

14

14

13

5

4

Strategies of competitors

Strategies of leading global firms in your industry

Strategies of leading global firms outside your industry

Ideas of well-known Chinese management gurus

External consultants

Other

Ideas of well-known international management gurus



4. What is your company’s current strategic focus? Select up to three options. (% respondents)

Product and process technology

Customer-service standards

Capacity

Marketing and brand building

IT systems

Human-capital development

Diversification

Achievement of greater business focus

Stockmarket listing

44

49

21

67

24

22

21

6

6

5. What are your company’s main target markets for the next three years? Select up to three options. (% respondents)

Mainland China

Taiwan, Hong Kong and Macau

South-east Asia

South Asia

North-east Asia (Japan, South Korea)

Australia and New Zealand

North America

Latin America

Europe and Russia

Middle East and Africa

91

7

17

2

17

3

11

1

12

8

6. Which companies in China are your main competitors? Select up to three options. (% respondents)

Domestic large state-owned

Domestic small state-owned

Domestic collectives

Domestic private

Taiwan, Hong Kong or Macau-invested firms

Other Asian firms

North American firms

European firms

55

9

12

45

13

9

9

10




7. What kind of tie-ups with other firms does your company have planned? (% respondents)

No tie-ups planned

Establishing joint ventures

Establishing strategic alliances

M&A

Other

29

31

47

23

4

8. For your company, what are the main purposes of securing tie-ups with other firms? Select up to three options. (% respondents)

Access to technology

Access to management expertise

To improve position in the domestic market

To improve access to overseas markets

Access to a brand

Access to higher growth business areas

Diversification of risk

Other

33

7

62

20

13

38

18

5

9. How important is each of the following to the making of major decisions in your company? Rate on a scale of 1-5, with 1=Unimportant and 5=Very important. (% respondents)

1 2 3 4 5

The board of directors 6 2 6 19 67

Senior management 2 2 6 39 51

Senior-most executive (founder, chairman, CEO, president or managing director)

3 2 21 35 39

The workers 14 23 34 15 14



10. How important is each of the following criteria when hiring top executives at your company? Rate on a scale of 1-5, with 1=Unimportant and 5=Very important. (% respondents)

1 2 3 4 5

Personal qualities 1 0 2 14 83

Experience 0 3 9 38 50

Formal education level 1 3 27 44 25

Relationship with existing executives 23 16 31 17 13

Relationship with government/officials 17 22 24 25 12

Cost of compensation package 5 16 39 25 15

11. How important is each of the following criteria in determining general pay scales in your company? Rate on a scale of 1-5, with 1=Unimportant and 5=Very important. (% respondents)

1 2 3 4 5

Benchmarking within the industry 1 5 20 36 38

Performance 0 2 8 29 61

Age / seniority 10 17 31 32 10

Government norms 12 19 29 26 15

12. How important is each of the following strategies in recruiting and retaining staff in your company? Rate on a scale of 1-5, with 1=Unimportant and 5=Very important. (% respondents)

1 2 3 4 5

Higher level of basic pay 4 11 36 32 17

Higher level of performance- related pay 0 6 9 35 51

Opportunities for promotion 2 3 19 48 28

Company image 1 2 17 45 37

Company location 3 9 27 39 23

Opportunities for training & development 1 6 21 36 36




13. From what sources do you hire educated staff? Rank these five options from 1=Most common source to 5=Least common source. (% respondents)

1 2 3 4 5 Rank

State-owned enterprises 62 65 35 8 6 2

Private domestic companies 24 33 85 17 17 3

Foreign companies 2 12 25 90 47 4

New graduates 78 54 23 14 7 1

Mainland Chinese returnees 10 12 8 47 99 5

14. What are the key weaknesses of staff in your company? Select up to three options. (% respondents)

Inability to work independently

Lack of innovation and creativity

Lack of work ethic

Lack of quality consciousness

Poor communication skills

Lack of strategic thinking

Poor people-management skills

Inflexibility

12

63

2

14

33

53

10

16

15. How difficult is each of the following financial challenges to your company? Rate on a scale of 1- 5, with 1=Not at all difficult and 5=Very difficult. (% respondents)

1 2 3 4 5

Accessing sources of finance 20 11 28 19 21

Maintaining internal financial controls 26 19 16 20 19

Managing credit with supplier/customer 10 19 31 23 16

Ensuring effective risk management 7 17 24 24 27



16. What proportion of your company’s annual funding comes from the following sources? (% respondents)

0-25% 25-50% 50-75% Over 75% Don't know

Family / friends 56 19 7 2 16

Formal banking sector 17 29 29 22 3

Retained earnings 26 30 19 20 4

Formal capital markets 25 34 16 16 7

Informal financial sector 58 12 6 3 21

17. Which of the following pose the greatest risk to the success of your company’s business plan? Select up to three options. (% respondents)

Unethical behaviour by managers or employees

Government intervention in the banking system

Shortages of working capital

Intensifying pricing pressure

IT or logistics failures

Other

29

14

10

69

27

12

18. When seeking to forecast the likely success of planned investment projects, which, if any, of the following macroeconomic risks does your company take into account? Select all that apply. (% respondents)

Higher interest rates

Exchange-rate change

External protectionism

Pace of growth of domestic market

Pace of growth of external markets

Political instability

Don’t know

Other

33

30

23

66

21

23

5

4




19. Which of the following do you perceive as affecting your pricing power? Rate on a scale of 1-5, with 1=Significantly increasing pricing power and 5=Significantly eroding it. (% respondents)

1 2 3 4 5

Competition 31 13 7 19 29

The number of buyers/customers 20 29 28 17 5

The threat of substitute goods/services 8 20 43 18 11

Economies of scale 19 34 29 10 8

20. Finance cost and efficiency: tick those statements that apply. (% respondents)

I know the total cost to our firm of operating the business function 66

Our firm has established a finance-shared service centre 51

Our firm has outsourced portions of finance operations 5

Our firm manages finance operations at ___% [ENTER % BELOW] of total revenue 26

Our firm is considering setting up a finance-shared service centre 13

Our firm is considering outsourcing portions of its finance operations 6

Enter % here:

Average 2

Highest 20

Lowest 0

Standard deviation 5

21. Do you consider the following to be innovators? (% respondents)

7129

7327

5644

Your company

Your Chinese competitors

Your international competitors

Yes No



22. How important is innovation as a tool of competitiveness?(% respondents)

Critical77

Important22

Somewhat important1

23. In what ways is innovation manifested in your company? Rate on a scale of 1-5, with 1=Unimportant and 5=Very important. (% respondents)

1 2 3 4 5

Brand 4 4 6 28 58

Product design 3 7 12 25 52

Product quality 1 3 9 24 63

Distribution 5 8 30 30 27

Manufacturing process 8 7 23 27 35

Service quality 1 1 6 20 73

24. What percent of your company’s revenue is contributed by products or services launched within the past 36 months? (% respondents)

20-40%18

40-60%14

60-80%18

80-100%20

Don't know8

0-20%21




25. How important to your company is each of the following factors in encouraging technological innovation? Rate on a scale of 1-5, with 1=Unimportant and 5=Very important. (% respondents)

1 2 3 4 5

Government-funded research and development 30 15 19 25 11

Company-level research and development departments 4 4 15 28 49

Company-level programmes to reward ideas from staff and managers

2 3 18 42 34

Laws to protect intellectual-property rights 13 11 26 24 25

Enforcement of intellectual-property rights 14 14 22 28 21

Size of company 7 5 27 30 30

26. What is your company's primary marketing activity? Select one option. (% respondents)

Media advertising61

Sponsorship11

Events and roadshows18

Direct mail10

27. When conducting marketing, which of the following tools does your company use? Choose up to three. (% respondents)

Pre-marketing research73

Domestic advertising agencies53

Post-marketing research37

Local consultants16

Foreign consultants5

Foreign advertising agencies7



28. How important to your company is each of the following considerations when planning marketing initiatives? Rate on a scale of 1-5, with 1=Unimportant and 5=Very important. (% respondents)

1 2 3 4 5

Boosting short-term sales 9 10 35 31 15

Gaining market share by value 1 1 9 30 60

Generating product awareness 1 5 17 35 42

Generating brand awareness 1 4 7 33 55

Generating customer loyalty 0 2 5 25 68

29. How would you define the role of a brand? Select one option. (% respondents)

Something that reflects the valuesand culture of your

product/service/company76

A name for a product/service/company9

Something that helps people recognise your product/service/company10

Something that stands for the benefits of your product/service/company5

30. How often does your company formally check the health/status of your brand? Select one option. (% respondents)

Regularly through a tracking study74

Once a year10

Only when there is a new product launch3Never7

Don’t know6




31. How important a challenge will each of the following be to your company’s brand in the next five years in China? Rate on a scale of 1-5, with 1=Unimportant and 5=Very important. (% respondents)

1 2 3 4 5

Growing competition 1 3 10 22 64

Ability to premium price 6 9 35 33 17

Counterfeit brands 29 13 22 16 19

Sustaining continued investment in brand building 4 3 18 34 40


Appendix: Survey results/manufacturing cluster onlyDomestic companies in ChinaTaking on the competition


Manufacturing 41

Agriculture and agribusiness 5Chemicals

14

Consumer goods 14

Energy and natural resources 12

Healthcare, pharmaceuticals and biotechnology 6

Automotive 7


Rmb10bn to Rmb50bn15

More than Rmb50bn2

Rmb500m to Rmb1bn 10

Rmb1bn to Rmb10bn34


Rmb100m or less11

Appendix: Survey results/manufacturing cluster only

Domestic companies in ChinaTaking on the competitionFilter: Manufacturing [agriculture & agribusiness, automotive, chemicals, consumer goods, energy & natural resources, pharmaceuticals & biotechnology, manufacturing]

The base is 94 respondents, except where specifiedFigures may not add to 100% due to rounding


Appendix: Survey results/manufacturing cluster onlyDomestic companies in China



More than 45073

Between 20 and 504


Between 50 and 1507

Less than 20 1


CIO/Technology director3

Manager2

Head of business unit1



SVP/VP/Director21

Board member 10

CFO/Treasurer/Comptroller11




1. In any given year, how important to your company are the following indicators to measuring business performance? Please rate on a scale of 1 to 5, where 1=Not important and 5=Very important. (% respondents)

1 2 3 4 5










1 2 3 4 5


Brand 4 3 10 33 50









70

68

20

18

14

10

5






Other


Base : 92 respondents







Capacity


IT systems


Diversification


Stockmarket listing

62

33

26

68

22

18

23

7

5

62

33

26

68

22

18

23

7

5



Mainland China


South-east Asia

South Asia



North America

Latin America

Europe and Russia


87

7

22

2

23

4

16

1

21

10






Domestic private


Other Asian firms


European firms

59

11

8

49

12

11

8

13





No tie-ups planned



M&A

Other

24

41

45

25

3







Access to a brand



Other

38

5

58

23

9

45

12

7



1 2 3 4 5




2 2 24 38 33

The workers 14 20 32 17 16





1 2 3 4 5








1 2 3 4 5






1 2 3 4 5










1 2 3 4 5 Rank









Lack of work ethic





Inflexibility

13

68

3

16

30

48

8

14



1 2 3 4 5









0-25% 25-50% 50-75% Over 75% Don't know












Other

23

10

10

81

34

7









Don’t know

Other

33

37

33

68

24

19

2

3




1 2 3 4 5












Enter % here:

Average 2

Highest 20

Lowest 0



7525

8020

6139

Your company



Yes No




22. How important is innovation as a tool of competitiveness?(% respondents)

Critical76

Important24


1 2 3 4 5

Brand 2 4 6 30 57







20-40%23

40-60%15

60-80%22

80-100%18

Don't know5

0-20% 17




25. How important to your company is each of the following factors in encouraging technological innovation Rate on a scale of 1-5, with 1=Unimportant and 5=Very important. (% respondents)

1 2 3 4 5




1 2 17 46 34





Media advertising61

Sponsorship13


Direct mail10






Local consultants19








1 2 3 4 5










A name for a product/service/company9Something that helps people recognise your product/service/company5Something that stands for the benefits of your product/service/company6




Once a year12

Only when there is a new product launch2Never5Don’t know5





1 2 3 4 5







Appendix: Survey results/services cluster onlyDomestic companies in China



Professional services 12

Retailing 26

Financial services 31

Logistics and distribution 31


Rmb10bn to Rmb50bn 5

Rmb500m to Rmb1bn 19

Rmb1bn to Rmb10bn17


Rmb100m or less 33

Appendix: Survey results/services cluster only

Domestic companies in ChinaTaking on the competitionFilter: Financial services, logistics & distribution, retailing, professional services

The base is 42 respondents , except where specifiedFigures may not add to 100% due to rounding


Appendix: Survey results/services cluster onlyDomestic companies in ChinaTaking on the competition


More than 45038

Between 20 and 5019


Between 50 and 150 21 Less than 20

10


CIO/Technology director 2

Manager7



SVP/VP/Director19

Board member 12

CFO/Treasurer/Comptroller 2





1. In any given year, how important to your company are the following indicators to measuring business performance? Please rate on a scale of 1 to 5, where 1=Not important and 5=Very important. (% respondents)

1 2 3 4 5










1 2 3 4 5


Brand 2 7 12 36 43









67

64

19

14

12

10

5





Other








Capacity


IT systems


Diversification


Stockmarket listing

24

71

7

62

26

31

17

0

5


Mainland China


South-east Asia

South Asia



North America

Latin America

Europe and Russia


93

5

5

0

14

2

10

0

5

5





Domestic private


Other Asian firms


European firms

48

5

14

43

12

12

10

7





No tie-ups planned



M&A

Other

39

24

37

22

2







Access to a brand



Other

29

17

64

17

17

33

26

2


1 2 3 4 5




2 0 17 36 45

The workers 14 19 36 21 10




1 2 3 4 5








1 2 3 4 5






1 2 3 4 5











1 2 3 4 5 Rank









Lack of work ethic





Inflexibility

12

52

2

10

43

45

10

17


1 2 3 4 5








0-25% 25-50% 50-75% Over 75% Don't know












Other

39

15

7

44

20

20









Don’t know

Other

41

27

12

63

27

22

5

7






1 2 3 4 5














Enter % here:

Average 3

Highest 20

Lowest 0



5941

6040

5348

Your company



Yes No




22. How important is innovation as a tool of competitiveness? (% respondents)

Critical80

Important20


Somewhat important = 0

Not important = 0


1 2 3 4 5

Brand 5 7 5 24 59








20-40%17

40-60%15 60-80%

5

80-100%15

Don't know100-20%

39





25. How important to your company is each of the following factors in encouraging technological innovation? Rate on a scale of 1-5, with 1=Unimportant and 5=Very important)? (% respondents)

1 2 3 4 5




2 5 17 44 32






Media advertising49

Sponsorship10


Direct mail15






Local consultants15







1 2 3 4 5










A name for a product/service/company12

Something that helps people recognise your product/service/company22

Something that stands for the benefits of your product/service/company5Base : 41 respondents



Once a year2Only when there is a new product launch2Never5Don’t know12






1 2 3 4 5






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