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© 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
Between 50 and 15012
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
© The Economist Intelligence Unit 2005 83
Appendix: Survey resultsDomestic companies in China
Taking on the competition
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
84 © The Economist Intelligence Unit 2005
Appendix: Survey resultsDomestic companies in ChinaTaking on the competition
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
© The Economist Intelligence Unit 2005 85
Appendix: Survey resultsDomestic companies in China
Taking on the competition
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
86 © The Economist Intelligence Unit 2005
Appendix: Survey resultsDomestic companies in ChinaTaking on the competition
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
© The Economist Intelligence Unit 2005 87
Appendix: Survey resultsDomestic companies in China
Taking on the competition
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
88 © The Economist Intelligence Unit 2005
Appendix: Survey resultsDomestic companies in ChinaTaking on the competition
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
© The Economist Intelligence Unit 2005 89
Appendix: Survey resultsDomestic companies in China
Taking on the competition
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
90 © The Economist Intelligence Unit 2005
Appendix: Survey resultsDomestic companies in ChinaTaking on the competition
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
© The Economist Intelligence Unit 2005 91
Appendix: Survey resultsDomestic companies in China
Taking on the competition
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
92 © The Economist Intelligence Unit 2005
Appendix: Survey resultsDomestic companies in ChinaTaking on the competition
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
© The Economist Intelligence Unit 2005 93
Appendix: Survey resultsDomestic companies in China
Taking on the competition
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
94 © The Economist Intelligence Unit 2005
Appendix: Survey results/manufacturing cluster onlyDomestic companies in ChinaTaking on the competition
Which is your company's main business?(% respondents)
Manufacturing 41
Agriculture and agribusiness 5Chemicals
14
Consumer goods 14
Energy and natural resources 12
Healthcare, pharmaceuticals and biotechnology 6
Automotive 7
What is your company's annual revenue? (% respondents)
Rmb10bn to Rmb50bn15
More than Rmb50bn2
Rmb500m to Rmb1bn 10
Rmb1bn to Rmb10bn34
Rmb100m to Rmb500m29
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
© The Economist Intelligence Unit 2005 95
Appendix: Survey results/manufacturing cluster onlyDomestic companies in China
Taking on the competition
What is the size of your company's workforce?(% respondents)
More than 45073
Between 20 and 504
Between 150 and 45014
Between 50 and 1507
Less than 20 1
Which of the following best describes your title?(% respondents)
CIO/Technology director3
Manager2
Head of business unit1
CEO/President/Managing director 23
Other C-level executive 9
SVP/VP/Director21
Board member 10
CFO/Treasurer/Comptroller11
Head of department20
96 © The Economist Intelligence Unit 2005
Appendix: Survey results/manufacturing cluster onlyDomestic companies in ChinaTaking on the competition
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
Revenue & revenue growth 0 0 13 24 63
Market share 0 3 10 30 57
Operating profit & growth 2 0 6 19 72
Return on equity 1 3 20 32 43
Return on investment 2 3 16 29 49
Productivity 1 5 16 39 39
Size relative to rivals 4 11 30 35 19
Overseas presence 18 20 22 20 19
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 9 27 28 32
Brand 4 3 10 33 50
Government support 11 14 26 28 22
Distribution channels 4 6 29 35 26
Speed to market 0 6 22 31 40
R&D capability 0 10 20 32 38
Supply-chain efficiency 4 3 33 40 19
Effective leadership 1 3 13 33 50
Committed workforce 2 3 16 40 38
3. Where do ideas for strategic initiatives in your firm come from? Select up to three options. (% respondents)
70
68
20
18
14
10
5
Strategies of leading global firms in your industry
Strategies of competitors
External consultants
Strategies of leading global firms outside your industry
Ideas of well-known Chinese management gurus
Other
Ideas of well-known international management gurus
Base : 92 respondents
© The Economist Intelligence Unit 2005 97
Appendix: Survey results/manufacturing cluster onlyDomestic companies in China
Taking on the competition
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
62
33
26
68
22
18
23
7
5
62
33
26
68
22
18
23
7
5
Base : 92 respondents
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
87
7
22
2
23
4
16
1
21
10
Base : 92 respondents
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
59
11
8
49
12
11
8
13
Base : 92 respondents
98 © The Economist Intelligence Unit 2005
Appendix: Survey results/manufacturing cluster onlyDomestic companies in ChinaTaking on the competition
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
24
41
45
25
3
Base : 91 respondents
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
38
5
58
23
9
45
12
7
Base : 91 respondents
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 8 2 4 16 70
Senior management 2 3 9 34 52
Senior-most executive (founder, chairman, CEO, president or managing director)
2 2 24 38 33
The workers 14 20 32 17 16
© The Economist Intelligence Unit 2005 99
Appendix: Survey results/manufacturing cluster onlyDomestic companies in China
Taking on the competition
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 2 0 2 10 86
Experience 0 3 10 44 44
Formal education level 1 1 27 52 19
Relationship with existing executives 25 14 28 16 17
Relationship with government/officials 16 22 26 25 11
Cost of compensation package 4 12 41 27 16
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 2 6 20 34 37
Performance 0 2 6 33 58
Age / seniority 9 16 30 34 11
Government norms 9 18 30 29 14
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 2 9 35 40 14
Higher level of performance- related pay 0 5 6 36 52
Opportunities for promotion 3 4 17 47 29
Company image 0 0 14 46 40
Company location 0 10 24 44 22
Opportunities for training & development 1 6 19 36 37
100 © The Economist Intelligence Unit 2005
Appendix: Survey results/manufacturing cluster onlyDomestic companies in ChinaTaking on the competition
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 39 30 19 4 2 1
Private domestic companies 7 25 47 8 7 3
Foreign companies 1 7 10 52 24 4
New graduates 42 29 12 7 4 2
Mainland Chinese returnees 5 3 6 23 57 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
13
68
3
16
30
48
8
14
Base : 92 respondents
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 23 13 24 23 16
Maintaining internal financial controls 30 18 18 16 18
Managing credit with supplier/customer 11 19 32 26 13
Ensuring effective risk management 6 16 28 24 26
© The Economist Intelligence Unit 2005 101
Appendix: Survey results/manufacturing cluster onlyDomestic companies in China
Taking on the competition
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 57 19 5 0 19
Formal banking sector 16 34 24 26 0
Retained earnings 25 30 20 22 3
Formal capital markets 32 35 16 11 5
Informal financial sector 64 7 14 0 14
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
23
10
10
81
34
7
Base : 91 respondents
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
37
33
68
24
19
2
3
102 © The Economist Intelligence Unit 2005
Appendix: Survey results/manufacturing cluster onlyDomestic companies in ChinaTaking on the competition
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 32 17 6 19 26
The number of buyers/customers 17 36 23 20 4
The threat of substitute goods/services 5 21 40 20 14
Economies of scale 18 38 26 14 3
20. Finance cost and efficiency: tick those statements that apply. (% respondents)
I know the total cost to our firm of operating the business function 65
Our firm has established a finance-shared service centre 53
Our firm has outsourced portions of finance operations 2
Our firm manages finance operations at ___% [ENTER % BELOW] of total revenue 29
Our firm is considering setting up a finance-shared service centre 16
Our firm is considering outsourcing portions of its finance operations 7
Enter % here:
Average 2
Highest 20
Lowest 0
Standard deviation 4
21. Do you consider the following to be innovators? (% respondents)
7525
8020
6139
Your company
Your Chinese competitors
Your international competitors
Yes No
© The Economist Intelligence Unit 2005 103
Appendix: Survey results/manufacturing cluster onlyDomestic companies in China
Taking on the competition
22. How important is innovation as a tool of competitiveness?(% respondents)
Critical76
Important24
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 2 4 6 30 57
Product design 1 4 13 25 57
Product quality 0 1 4 21 73
Distribution 2 5 29 36 28
Manufacturing process 0 7 19 31 43
Service quality 0 0 4 24 71
24. What percent of your company’s revenue is contributed by products or services launched within the past 36 months? (% respondents)
20-40%23
40-60%15
60-80%22
80-100%18
Don't know5
0-20% 17
Base : 93 respondents
104 © The Economist Intelligence Unit 2005
Appendix: Survey results/manufacturing cluster onlyDomestic companies in ChinaTaking on the competition
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 20 18 21 29 12
Company-level research and development departments 1 0 11 32 56
Company-level programmes to reward ideas from staff and managers
1 2 17 46 34
Laws to protect intellectual-property rights 6 11 27 28 29
Enforcement of intellectual-property rights 9 10 23 38 22
Size of company 3 4 32 31 30
26. What is your company's primary marketing activity? Select one option. (% respondents)
Media advertising61
Sponsorship13
Events and roadshows16
Direct mail10
Base : 93 respondents
27. When conducting marketing, which of the following tools does your company use? Choose up to three. (% respondents)
Pre-marketing research78
Domestic advertising agencies56
Post-marketing research38
Local consultants19
Foreign consultants4
Foreign advertising agencies9
Base : 91 respondents
© The Economist Intelligence Unit 2005 105
Appendix: Survey results/manufacturing cluster onlyDomestic companies in China
Taking on the competition
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 3 14 38 33 12
Gaining market share by value 0 0 10 29 61
Generating product awareness 1 3 16 32 48
Generating brand awareness 0 3 4 38 55
Generating customer loyalty 0 0 4 29 67
Base : 93 respondents
29. How would you define the role of a brand? Select one option. (% respondents)
Something that reflects the valuesand culture of your
product/service/company80
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
Base : 93 respondents
30. How often does your company formally check the health/status of your brand? Select one option. (% respondents)
Regularly through a tracking study75
Once a year12
Only when there is a new product launch2Never5Don’t know5
Base : 93 respondents
106 © The Economist Intelligence Unit 2005
Appendix: Survey results/manufacturing cluster onlyDomestic companies in ChinaTaking on the competition
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 0 3 11 29 57
Ability to premium price 3 6 40 32 18
Counterfeit brands 19 12 31 23 15
Sustaining continued investment in brand building 2 2 18 39 39
Base : 93 respondents
© The Economist Intelligence Unit 2005 107
Appendix: Survey results/services cluster onlyDomestic companies in China
Taking on the competition
Which is your company's main business?(% respondents)
Professional services 12
Retailing 26
Financial services 31
Logistics and distribution 31
What is your company's annual revenue? (% respondents)
Rmb10bn to Rmb50bn 5
Rmb500m to Rmb1bn 19
Rmb1bn to Rmb10bn17
Rmb100m to Rmb500m26
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
108 © The Economist Intelligence Unit 2005
Appendix: Survey results/services cluster onlyDomestic companies in ChinaTaking on the competition
What is the size of your company's workforce?(% respondents)
More than 45038
Between 20 and 5019
Between 150 and 45012
Between 50 and 150 21 Less than 20
10
Which of the following best describes your title?(% respondents)
CIO/Technology director 2
Manager7
CEO/President/Managing director 26
Other C-level executive 5
SVP/VP/Director19
Board member 12
CFO/Treasurer/Comptroller 2
Head of department26
© The Economist Intelligence Unit 2005 109
Appendix: Survey results/services cluster onlyDomestic companies in China
Taking on the competition
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
Revenue & revenue growth 2 0 10 36 52
Market share 2 5 10 26 57
Operating profit & growth 2 2 10 17 68
Return on equity 5 0 21 26 48
Return on investment 5 2 19 36 38
Productivity 7 17 21 33 21
Size relative to rivals 5 7 21 29 38
Overseas presence 38 5 24 24 10
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 2 17 21 24 36
Brand 2 7 12 36 43
Government support 12 2 21 45 19
Distribution channels 17 12 17 19 36
Speed to market 0 10 17 40 33
R&D capability 5 14 29 33 19
Supply-chain efficiency 2 12 33 33 19
Effective leadership 0 7 7 48 38
Committed workforce 2 2 24 36 36
3. Where do ideas for strategic initiatives in your firm come from? Select up to three options. (% respondents)
67
64
19
14
12
10
5
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
Other
External consultants
Ideas of well-known international management gurus
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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
24
71
7
62
26
31
17
0
5
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
93
5
5
0
14
2
10
0
5
5
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
48
5
14
43
12
12
10
7
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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
39
24
37
22
2
Base : 41 respondents
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
29
17
64
17
17
33
26
2
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 5 2 7 20 66
Senior management 0 0 0 51 49
Senior-most executive (founder, chairman, CEO, president or managing director)
2 0 17 36 45
The workers 14 19 36 21 10
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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 0 0 0 24 76
Experience 0 2 7 24 67
Formal education level 2 5 33 36 24
Relationship with existing executives 19 21 29 21 10
Relationship with government/officials 19 21 17 33 10
Cost of compensation package 2 19 36 29 14
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 0 2 19 40 38
Performance 0 2 10 24 64
Age / seniority 10 7 31 40 12
Government norms 17 17 29 24 14
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 10 14 31 21 24
Higher level of performance- related pay 0 12 10 33 45
Opportunities for promotion 0 0 21 50 29
Company image 0 2 14 43 40
Company location 7 7 24 36 26
Opportunities for training & development 0 7 21 33 38
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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 11 17 11 1 2 2
Private domestic companies 13 4 14 4 7 3
Foreign companies 0 2 7 20 13 5
New graduates 14 14 9 5 0 1
Mainland Chinese returnees 4 5 1 12 20 4
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
52
2
10
43
45
10
17
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 19 12 31 12 26
Maintaining internal financial controls 17 21 19 29 14
Managing credit with supplier/customer 12 21 36 14 17
Ensuring effective risk management 7 17 21 21 33
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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 27 27 18 0 27
Formal banking sector 13 23 32 23 10
Retained earnings 29 23 16 23 10
Formal capital markets 19 31 13 25 13
Informal financial sector 44 0 0 11 44
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
39
15
7
44
20
20
Base : 41 respondents
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
41
27
12
63
27
22
5
7
Base : 41 respondents
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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 32 7 12 20 29
The number of buyers/customers 22 24 34 12 7
The threat of substitute goods/services 12 27 41 10 10
Economies of scale 27 29 37 2 5
Base : 41 respondents
20. Finance cost and efficiency: tick those statements that apply. (% respondents)
I know the total cost to our firm of operating the business function 70
Our firm has established a finance-shared service centre 45
Our firm has outsourced portions of finance operations 8
Our firm manages finance operations at ___% [ENTER % BELOW] of total revenue 25
Our firm is considering setting up a finance-shared service centre 8
Our firm is considering outsourcing portions of its finance operations 3
Base : 40 respondents
Enter % here:
Average 3
Highest 20
Lowest 0
Standard deviation 6
21. Do you consider the following to be innovators? (% respondents)
5941
6040
5348
Your company
Your Chinese competitors
Your international competitors
Yes No
Base : 41 respondents
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22. How important is innovation as a tool of competitiveness? (% respondents)
Critical80
Important20
Base : 41 respondents
Somewhat important = 0
Not important = 0
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 5 7 5 24 59
Product design 5 10 12 34 39
Product quality 2 5 15 24 54
Distribution 7 15 24 24 29
Manufacturing process 23 8 23 23 25
Service quality 2 2 2 12 80
Base : 41 respondents
24. What percent of your company’s revenue is contributed by products or services launched within the past 36 months? (% respondents)
20-40%17
40-60%15 60-80%
5
80-100%15
Don't know100-20%
39
Base : 41 respondents
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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 45 8 23 15 10
Company-level research and development departments 7 5 22 29 37
Company-level programmes to reward ideas from staff and managers
2 5 17 44 32
Laws to protect intellectual-property rights 20 15 17 22 27
Enforcement of intellectual-property rights 20 20 15 22 24
Size of company 15 5 15 33 33
Base : 41 respondents
26. What is your company's primary marketing activity? Select one option. (% respondents)
Media advertising49
Sponsorship10
Events and roadshows27
Direct mail15
Base : 41 respondents
27. When conducting marketing, which of the following tools does your company use? Choose up to three. (% respondents)
Pre-marketing research66
Domestic advertising agencies44
Post-marketing research44
Local consultants15
Foreign consultants7
Foreign advertising agencies7
Base : 41 respondents
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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 12 5 29 39 15
Gaining market share by value 2 2 7 32 56
Generating product awareness 2 12 22 37 27
Generating brand awareness 2 7 10 27 54
Generating customer loyalty 0 2 2 27 68
Base : 41 respondents
29. How would you define the role of a brand? Select one option. (% respondents)
Something that reflects the valuesand culture of your
product/service/company61
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
30. How often does your company formally check the health/status of your brand? Select one option. (% respondents)
Regularly through a tracking study78
Once a year2Only when there is a new product launch2Never5Don’t know12
Base : 41 respondents
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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 0 5 12 12 71
Ability to premium price 12 12 29 34 12
Counterfeit brands 32 15 20 7 27
Sustaining continued investment in brand building 7 5 22 27 39
Base : 41 respondents
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