I found this article on cnn.com the other day and though it was very interesting. The article discusses a Beijing-based company purchasing a mega shopping mall in Milwaukee. The president of the Beijing Company believes that they have a great opportunity to expand overseas because the cost of doing business within our economy is at a minimum.
I found this article interesting because this is a reverse study of what our class is currently conducting. My immediate questions were: How will they adapt to our culture? What stores will they have within the mall? Who will be managing it? Is there a market? Why Milwaukee? Etc.
The article goes on to say the other Asian countries have recently purchased U.S. Commercial properties such as: New York’s Rockefeller Center and Pebble Beach golf Course in California. Steven Dickinson, a China-based lawyer, stated that most of these investments never turned out well. The main reason for their failure was ignorance by the foreign investors. He believes that Asian firms buy a great deal of American “trophy malls” when their currency is the strongest and growing global influence encourages the country to invest overseas. Steven’s specific argument to this rationale is that this company will go into a place like Milwaukee and have no clue what the people in Milwaukee want. Historically, foreign companies will buy the piece of commercial real estate and try to run it like a locally based operation. Then, when everything goes south for the company, they bail on their investment.
The president of the Beijing Company believes that this investment is exactly what Milwaukee needs. They believe that the people are friendly, the environment is peaceful, and the pace of living is slow; which is a perfect place for a Chinese enterprise to go abroad. When reading this statement, I feel that this is the exact opposite of my impression of the Chinese culture. The company is using recruiting methods such as, six months free rent and a local mall management firm, all in hopes that this will help land authentic Chinese ran stores in their mall. Their ultimate goal is to help the Chinese brands boost their image in America while enabling American businesses to connect directly with the Chinese wholesalers.
The article then goes on to debate whether this venture will be successful or not. My thoughts on the situation are; the company must adapt its management to abide by the local culture, they should invest in landing American run businesses as well as Chinese, and they should possibly look to a Consultant company that could assist in management duties. Without a strong business plan and management team to implement it, I feel that this company will fail within the Milwaukee market.
What are everyone else’s thoughts?
"Coming to Milwaukee: A Chinese Mega-mall? - CNN.com." CNN.com - Breaking News, U.S., World, Weather, Entertainment & Video News. Web. 08 Mar. 2010.
Very interesting. I think there is a learning curve involved for any venture of this kind. My guess is that Chinese businesses are testing waters and therefore, Milwaukee is a low key way to do it. I have no doubt that there will be more investment from China into US, specially in the real estate now that it at rock bottom while in China, real estate costs are sky-high.
ReplyDeleteGrade for this blog- 5 points.