Bayer AG of Germany (1994–Date)
"Entry and Expansion – Getting it right the first
time"
"Expansion – Intelligence and influence to expand on budget and
on time"
NV Bekaert of Belgium (2005–Date)
"Competition – The China Threat – Complex competition and
collaboration strategy"
LM Ericsson of Sweden (1991–Date)
"Entry and Expansion – From sales revenue of US$ 300 million to over
US$ 1.5 billion"
International Power plc of the United Kingdom
(1998–Date)
"Dispute, Workout and Exit – Resolving conflict and retrieving funds"
Eastman Kodak Company of the USA
(1992–1994)
"Dispute, Workout and Entry – The Leap–frog Effect – Multi–million
US$ income recovery and market
dominance"
Liberty Mutual Group of the USA (1996–2001)
"Entry – Many firsts and an innovative strategy"
Entry and Expansion – Getting it right the first time
Bayer AG of Germany (1994–Date)
XRG began working with Bayer AG (“Bayer”) when the company had no direct investments in China. XRG assisted Bayer to prepare for entry in to the China market–using the XRG Process–by training over 150 Bayer senior managers and auditing the Bayer corporate and line of business China market entry strategies. Thereafter, joint Bayer–XRG teams assisted in the implementation of these strategies as all five Bayer divisions negotiated direct investments in the China market from 1994–1996.
Today, Greater China has become Bayer’s largest market
in Asia and third largest market in the world (after the U.S.
and Germany). From step–by–step investment in the early
1990s to large–scale and world–class facilities today, 10
production sites and 18 legal entities are currently operating
in this region. Bayer’s integrated production site in Shanghai
Chemical Industry Park is the largest investment that Bayer
has ever made outside Germany (with a planned total
investment of € 1.8 billion). XRG also worked for Bayer on
various other consulting assignments in Asia on an ad hoc,
non–exclusive basis.
XRG Select Client Reference
Mr. William Valentino is the Vice President–Corporate
Social Responsibility for Greater China. As one of the Bayer
senior managers trained by XRG in 1994, he is willing
to act as a reference for XRG’s capability in transferring
XRG process know–how to client project teams, auditing
China strategies and assisting in their implementation. He
readily acknowledges the accelerated results that the XRG
approach affords.
Dr. Norbert Stöhr was Head of the Liaison Office for Greater China with whom XRG worked on a multi–client project focused analyzing and relationship building on China’s emerging Fifth Generation Leaders. He is willing to act as a reference for XRG’s capability in analyzing the complex relationships between national and local organs and the individual leaders therein of importance to the on–going China business of Bayer, while, at the same time, transferring XRG process know–how to client project teams.
Expansion – Intelligence and influence to expand on budget and on time
Reuters plc of the United Kingdom (1998–2001)
In 1997, Reuters decided to expand the scale and scope of
corporate information services that it was providing to nonfinancial
institutions and companies in China. Consequently,
in l998, it set up a China project team to explore market
potential. In the preparatory stages, Reuters decided to
employ external consultants and sought out a firm that would
not only contribute to the strategy development phases of the
study work but also one which had proven implementation
capabilities, especially in gaining government approvals.
Reuters had first heard about the consultancy services of XRG
from one of their previous clients. After meeting with one of
their principals and reviewing their hands–on approach to
assisting companies in China and their extensive track record,
Reuters signed up with XRG to create a team that worked
together from 1998 through 2001. The team successfully
completed its work on time and under budget. The XRGReuters
team conducted extensive, but discreet market
research in a number of industrial sectors in a systematic and
cost–effective manner. The team then obtained internal as
well as PRC government approval to establish Qingniao.net,
a new, wholly–owned, Reuters Internet information service
provider in China. XRG also assisted in preparing the initial
business plan for the start–up enterprise.
XRG Select Client Reference
Ms. Sara Brazendale was Reuter’s New Markets Manager responsible for Reuter’s Qingniao project team in China (1998–2001). She is willing to act as a reference for XRG’s expansion strategy development and accelerated implementation capability to achieve commercial objectives for clients in China.
Competition – The China Threat – Complex competition and collaboration strategy
NV Bekaert of Belgium (2005–Date)
Customers in more than 120 countries choose to work with
Bekaert for the high–tech advanced products, systems and
services Bekaert provides based on its 2 core competencies: advanced metal transformation and advanced materials and
coatings. Although its main focus is on intermediate products,
Bekaert keeps in close touch with end–users so that it can
anticipate their needs and offer its customers the solutions
that give them a competitive edge in their markets. Bekaert’s
workforce of over 19,300 is committed to building win–win
relationships with its customers, based on equal partnerships
characterized by mutual trust and understanding.
In pursuit of its strategic objective of sustainable profitable
growth, Bekaert aims for market and technological leadership
and is a major player in its markets worldwide. In 2006 Bekaert
achieved combined sales of € 3.2 billion.
Bekaert has experienced significant growth in China in recent
years, in almost all of its business platforms and in particular
in its steel cord products for tire reinforcement. Today, Bekaert
has more than 5,000 employees in China, with production
platforms in Jiangyin, Shenyang, Weihai, Suzhou, Wuxi and
Shanghai.
Bekaert and XRG
Starting in mid–2005, XRG worked as part of a China project team for the Bekaert Steel Cord Division. The team was tasked with studying and developing a strategy to deal with increasing Chinese competition inside and outside mainland China.
It took the Bekaert–XRG team only five months to complete a comprehensive multilateral relationship development and competition strategy to outmaneuver Bekaert’s main domestic PRC Chinese competitors. In early 2006, the joint Bekaert–XRG team presented its proposed strategy to the Board. This set the course for two to three years of implementation work including:
• A series of strategic alliances and related investments
(planned to exceed
€ 250
million) designed to “shift the
center of gravity” in Bekaert’s global
supply
chain
towards
the China market acquiring a significant minority share
in
the
listed company of a major PRC state–owned enterprise
strategic
partner.
• To date, XRG continues to support on an ad hoc basis the
implementation of
the
Bekaert Steel Cord Division’s China
strategy.
XRG Select Client Reference
Mr. Geert Roelens, Group Executive Vice President, Advanced
Wire Products of NV Bekaert SA led the joint Bekaert–XRG
China project team. Mr. Roelens is willing to act as a reference
for XRG’s capabilities in the areas of multilateral relationship
development and competition strategy development and
implementation. He also worked with XRG on a multiclient
XRG project focused on analyzing and building
relationships with China’s emerging Fifth Generation
Leaders. Therefore, he can also act as a reference for XRG’s
capability in analyzing the complex relationships between
national and local organs, and the individual leaders of
importance to Bekaert Steel Cord’s ongoing China business.
At the same time, Mr. Roelens can transfer XRG Process
know–how to client project teams.
Entry and Expansion – From sales revenue of US$ 300 million to over US$ 1.5 billion
LM Ericsson of Sweden (1991–Date)
XRG began working with LM Ericsson (“Ericsson”) when the
company had no direct investments in China, gross China
sales revenue of about US$ 300 million (all from direct import
sales) and only 20 resident staff in China spread over a few,
small, representative offices. Implementing the XRG Process,
XRG assisted Ericsson in developing a comprehensive, leapfrogstrategy to enter the China market and provided training
in market strategy development and venture negotiation.
Twenty–five senior managers and joint Ericsson–XRG teams
implemented Ericsson’s entry into the China market over a
four–year period from 1991 through 1995.
With XRG’s help in developing a comprehensive, multiphase
entry strategy for the China market Ericsson became
a major investor in China’s telecommunications revolution. It concluded seven manufacturing and installation joint
ventures (one venture with a license for public switch
manufacturing), and established one wholly foreign–owned
investment holding company with more than one thousand
local employees. The public switch manufacturing license
was a particularly challenging and rewarding achievement;
Ericsson won the license before AT&T and Northern Telecom
were able to use American and Canadian government
pressure to overturn the PRC State Council decree,
“Document #56”, forbidding the granting of any additional
approvals other than to the then three existing public switch
manufacturing ventures (i.e., Siemens, Shanghai Bell, NEC).
Between 1991 and 1994, Ericsson was an exclusive, first priority
XRG retainer client, using in excess of 200 XRG Principal
workdays each year. During 1995, XRG worked with Ericsson
as a trouble–shooter on an ad hoc, non–exclusive basis, in
China and Asia.
By the end of 1995, Ericsson’s China turnover exceeded US$
1.5 billion (comprising local and imported cellular and public
switch equipment sales) and its resident employees in China
numbered more than 3000. Between 1990 and late 1995, joint
Ericsson–XRG teams used the XRG Process to establish:
1991.09 China Strategy Development and Venture
Negotiation Program (Two Divisions), Telefonaktiebolaget LM
Ericsson, Stockholm, Sweden
1991.10 China Strategy Audit and Development,
Telefonaktiebolaget LM Ericsson, Stockholm, Sweden
1992.09 Nanjing Ericsson Communication Company
Limited, JVC between Ericsson Radio Systems AB, Stockholm,
Sweden and Nanjing Radio Factory, Jiangsu Province, PRC
1992.12 Guangzhou Ericsson Communication Company
Limited, JVC between Ericsson Radio Systems AB, Stockholm,Sweden and Guangzhou Radio Factory, Guangdong Mobile
Communication Corporation and Guangdong Machinery
Import & Export Corporation, Guangdong Province, PRC
1993.03 Public Telecommunication Switch Manufacturing
Technology Transfer Agreement between Ericsson Telecom
AB, Stockholm, Sweden and Nanjing Ericsson Communication
Company Limited, Jiangsu Province, PRC
1993.04 Guangdong Ericsson Engineering Company
Limited, JVC between Ericsson Telecom AB, Stockholm,
Sweden and Guangdong Post & Telecommunications
Administrative Bureau and Guangdong Machinery Import& Export Corporation, Guangdong Province, PRC
1993.07 Dalian Ericsson Company Limited, JVC between
Telefonaktiebolaget LM Ericsson, Stockholm, Sweden and
North Eastern Communication Group Company, Liaoning
Province, PRC
1994.03 Wholly Foreign Owned PRC National Holding
Company, Ericsson China Limited, Beijing, PRC by
Telefonaktiebolaget LM Ericsson, Stockholm, Sweden
1994.05 Modern Management Know–How Training Program,
Ericsson China Holding Limited, Beijing, PRC
1995.02 Beijing Ericsson Mobile Communications Company Limited, JVC between Telefonaktiebolaget LM Ericsson, Ericsson (China) Company Limited and China National Post And Telecommunications Industry Corporation, Beijing Communication Element Factory, Beijing Telecommunications Equipment Factory and Yung Shing Enterprise Company, Beijing, PRC
XRG Select Client Reference
Mr. Hans Ekström was the President of Ericsson in China (1991–1994). He is willing to act as a reference for XRG’s capability in
developing comprehensive, leap–frog strategies to enter the
China market and to assist in their implementation, while, at
the same time, transferring XRG process know–how to client
project teams. He readily acknowledges the accelerated
results that the XRG approach affords.
Mr. Erik Feng is the Executive Vice President/General Manager
of 3G Strategies of Ericsson (China) with whom XRG worked on
a multi–client XRG project focused analyzing and relationship
building on China’s emerging Fifth Generation Leaders. He is
willing to act as a reference for XRG’s capability in analyzing the
complex relationships between national and local organs and
the individual leaders therein of importance to the on–going
China business of Ericsson, while, at the same time, transferring
XRG process know–how to client project teams.
Dispute, Workout and Exit – Resolving conflict and retrieving funds
International Power plc of the United Kingdom (1998–Date)
National Power plc (“NP”) established a representative office
in Beijing in 1994 to develop and invest in large infrastructure
power station projects via BOT (build–operate–transfer) and
JV (joint venture) selection processes. The company also
wanted to invest in a number of small, co–generation plants
at the municipal level via JV’s with Chinese partners. The
strategy behind investing in the smaller end of the market
was that manageable investments could be made quickly
and the exposure to operating in the Chinese power market
would give the company valuable experience in developing
larger projects.
Due to lack of local market expertise, necessary local contacts
and manpower resources, NP contracted with a small, Hong
Kong–based, development company which specialized in
the small end of the Chinese power market. It invested US$
70 million in four JV projects, which, within a year, ran into
difficulties beyond what the company and its Hong Kong
based developer could handle.
NP turned to XRG to assist with conflict resolution and restructuring of the projects. The decision was based on the following:
• XRG’s proven track record in assisting and adding value to
commercial
organizations in China.
• The fact that its principals had direct field experience in
managing and
restructuring
business operations in the region.
• It had ready access to a wide network of key contacts and
influence.
• XRG’s practice of integrating with the client’s team to
develop strategy
and
tactics in a transparent fashion inspired
confidence.
• Its proprietary methodologies and disciplines would be
difficult for a
“distressed” team to develop on its own.
• Focus was redirected from contractual and legal conflict
resolution to a
systematic process of relationship management.
• XRG was able to flexibly adjust its assignment of resources
as the NP team
gained sufficient confidence to undertake
elements of the work on its own.
Initially, XRG chose one key project as a focus for a conflict resolution and restructuring exercise. NP had effectively lost control of the project, it hadn’t received any distribution payments for over 18 months and the Chinese partner was diverting all funds for his own use. Within a year of working closely with XRG, the joint NP–XRG workout team had recovered all funds, resolved conflicts and restructured the project giving NP full management control–and the full support of the municipal and provincial governments.
During 2000, NP decided to split up its operations into two
mainstream businesses. One company operated in the UK
market, and the other, renamed as International Power plc, was
to cover global operations. Reviewing its business strategy,
International Power decided to focus its efforts in the specific
markets for which it was best suited–North America, Europe
/ Middle East and Australia–and to withdraw from some
of the other markets, including China. It sought to divest its
assets in a way that would be satisfactory both to China and
the company.
With XRG’s assistance, NP established a workout and exit team.
While two of the four projects remained distressed, with no
payments having been received for some time, the workout
and exit team set out to divest all four projects. Despite the
disappointing results of a direct marketing exercise in which
no international investors, or power companies expressed
any interest in these assets, NP’s local partners engaged in
combined project restructuring and purchase negotiations
for the projects and all four were eventually sold and the funds
successfully repatriated to the UK.
XRG Select Client Reference
Mr. Vince Harris, OBE, a Chartered Engineer, operated with International Power plc (a FTSE 100 Independent Power company headquartered in London) and its predecessors continuously for over 38 years, both in the UK and in Asia. From 1997 to 2003, he was Director China based in Beijing. In 2001 he was concurrently appointed as the Chief Executive of The Hub Power Company Limited, one of Pakistan’s largest listed companies based in Karachi. With a foreign investment of US$ 1.5 billion, it is the country’s largest private sector power project. In September 2003, Mr. Harris was appointed CEO of International Power’s Middle East Region, based in Abu Dhabi, while continuing as CEO of Hub Power in Pakistan. International Power is the largest equity investor in Hub Power, whose other equity investors include Xenel Industries of Saudi Arabia, Mitsui and IHI of Japan and Entergy of the USA. From 2005 to 2008, he worked as the Regional Managing Director Asia of International Power’s Asia Region based in Singapore. Now an independent consultant, Mr. Harris is willing to act as a reference for XRG’s capabilities in the areas of breakthrough strategy development and implementation as well as workout and exit services with which he has extensive experience across Asia.
Dispute, Workout and Entry – The Leap–frog Effect – Multi–million US$ income recovery and market dominance
Eastman Kodak Company of the USA (1992–1994)
XRG worked with a Kodak Consumer Imaging team on
implementing a “multilateral relationship development and
management dispute resolution plan” involving a major
Kodak technology transfer agreement that it had entered into
with a Sino–Sino JV company in Xiamen, Fujian Province.
The XRG plan focused on accessing influential contacts at the
local, provincial and central government levels to manage
the re–negotiation of problematic aspects in the company’s
technology transfer agreement.
It took a joint Kodak CI–XRG team about six months to achieve
resolution of all outstanding technology transfer issues and a
multi–million US dollar income recovery agreement.
Subsequently, XRG trained some 25 managers from five
Kodak business units in the XRG Process. XRG also assisted in
the study conducted by a Kodak China holding company as
well as working with three Kodak divisions to develop initial
market entry strategies. The joint ventures are working.
The Kodak CI–XRG team developed a leap–frog China entry
strategy for Kodak to take over and consolidate the entire
photo materials industry in 1994.
XRG has also worked for Kodak on various other consulting
assignments in Asia on an ad hoc, non–exclusive basis:
1992.08 Renegotiation of a technology transfer and
licensing contract between Kodak (Export Sales) Limited and
Xiamen Fuda Photo Film Co., Fujian Province, PRC
1992.11 China strategy audit and development for three
divisions of Kodak (Export Sales) Limited
1994.02 Establishment of an equity joint venture, Kodak
Photofinishing Production (Central China) Ltd., between
Kodak (Export Sales) Limited and Phoenix Color Photo Service
Co. Ltd.
1994.03 Asia Pacific Vision and Strategy Development–Prism Project, Eastman Kodak Company, Professional Imaging
Division
1994.06 China Investment Holding Company Strategy Audit and Development, Kodak (Export Sales) Limited
XRG Select Client Reference
Mr. Douglas R. Gerber was responsible for Kodak’s Consumer Imaging business in China (1990–1993) and led the joint Kodak CI–XRG team that re–negotiated the Kodak–Xiamen Fuda technology transfer agreement (1991–1992). He is willing to act as a reference for XRG’s dispute resolution capability in achieving commercial objectives for clients in China. He has also seen the accelerated results, which can be achieved using the XRG Process.
Entry – Many firsts and an innovative strategy
Liberty Mutual Group of the USA (1996–2001)
Liberty Mutual saw China as a potentially large and lucrative
market for insurance and investment when it began an Asian
expansion program in 1996. With no prior experience in China,
the company recognized the need to enlist the assistance of
China business consultants to guide it through an opportunity
assessment and detailed market entry strategy.
Like many other firms seeking consulting advice in China,
Liberty faced the task of selecting a firm that could guide it
through the labyrinthine bureaucracy that issues operating
licenses, help it train executives and staff on China business,
and assist it in venture start–up activities. Liberty agreed
with XRG’s approach to cultivating working level contacts
as a foundation for actual business operations. Also, Liberty
understood the need for top–level contacts rather than base
their connections on only one powerful person who would
be able to facilitate license approval.
For Liberty, three attributes stood out about XRG; the
business track record of the principals, their knowledge of
China’s collective decision–making process and a scaleable
start–up team. XRG employees worked side–by–side with
Liberty employees throughout the process. This allowed
Liberty to keep employee costs incremental and helped
develop a knowledge base with Liberty’s own team.
XRG helped Liberty’s senior executives gain an in–depth
appreciation of the critical organizational factors entailed in
building a sustainable business in China–establishing lasting
professional contacts and supporters from the working level
to the most senior levels of government.
Liberty is now many years into its China market entry project. It received approval for an insurance operating license in 2002. A few notable milestones of Liberty’s experience in China
include:
• The first insurance representative office in the municipality
of Chongqing.
• A national–level, Liberty public and government relations
breakthrough: an
annual safety forum created by XRG and
co–organized with the central
government authorities
responsible for workplace safety and insurance in
China, the
China SafeWork Forum.
• An Occupational Safety and Health Research institute in
Shanghai and
Chongqing.
• A US$ 300 million equity investment in the China petroleum
industry.
• A US$ 600 million, joint venture, direct investment fund
based in Hong Kong.
The Asia Development Bank is a
co–investor.
XRG’s process of strategic investigation and client management
provided tools to help Liberty appreciate and manage the
interface between its China–based operations and its home
organization resources while minimizing the impact of
strategic organizational flaws and weaknesses. Indirectly, XRG
and the China market entry experience had a positive impact
on Liberty’s entire corporate strategic planning process.
XRG Select Client Reference
Mr. Alfred E. Bergbauer was Managing Director of Liberty Mutual, Greater China and on the initial market entry team from 1996 to late 1999. After leaving Liberty and China, Mr. Bergbauer worked in the Philippines for two years as COO of Insular General Insurance to restructure their operations. Thereafter, he was CEO of Winterthur’s Shanghai insurance joint venture until June 2002 when he joined Marsh USA, Inc. where he continued to work with the firm’s China clients. In January 2005, Mr. Bergbauer began working as a Senior Vice President at ACE International Advantage in Wilmington, Delaware where he headed the middle market international underwriting operation. In 2006, Mr. Bergbauer rejoined Marsh USA as Senior Vice President. He is willing to act as a reference for XRG’s capabilities in the areas of innovative China market strategy development and execution.