Recently I was asked to review a client proposal for a consultant who works in China’s sports market. I was so impressed I decided to share it with you. The names have been changed to protect the guilty, but Party X is a major world sports company, and the consultant is a former Milwaukee resident (not me).
I was particularly impressed by the clarity and brevity of the proposal. It can provide you something to compare the next time you are making or soliciting a consultant proposal.
Coming to China without knowing your objective or how to get there can only lead to disaster.
Based on the consultant’s initial appraisal of other foreign branded sport service entries into China, Client X should view China as a patchwork of independent markets, which need to be evaluated individually. Regional weather, linguistic, cultural and economic differences make China a difficult market to define.
Initially we would suggest looking at first-tier cities; they have higher concentrations of people, more homogenized cultures, higher disposable income, greater lifestyle consciousness, more time constraints and brand loyalty. We would suggest using the first-tier cities to establish brand recognition, which can be used to ease market entry into second- and third-tier cities (China has more than 350 cities with over 500,000 permanent residents).
Choice of the operational vehicle and revenue model is critical. In our experience, operational and revenue models should minimize sunk costs and maximize ease of collection and verification of revenues. Based on Client X’s objectives, the consultant will create an analysis and plan which will give Client X a China roadmap.
Phase One – Market entry investigation
Client X needs:
- A detailed analysis of China’s consumer and regulatory markets
- A case study breakdown of the competition, both national and international
- An evaluation of different operational vehicles including stand-alone, franchising and partnerships
- A sustainable revenue model
- A comprehensive market-entry/business plan
The consultant, a leader in the China sports marketing field, can provide these services. Results will be presented in a succinct report suitable for board review, with details and addendums.
Phase Two – Market entry preparations
Based on Client X’s selection of operational and revenue model, the consultant will assist Client X:
- Build a China implementation team.
- Select a company headquarters.
- Register the company.
- Obtain necessary licenses.
- Set up operational offices.
- Perform all required due-diligence.
- Develop an advertising and marketing plan with schedule and milestones.
- Test market assumptions.
- Begin rollout.
As a contrasting side note, I spent the greater part of last week commentating on China’s leadership change for CCTV, China’s English language channel, which broadcasts to more than 80 million people in 100 countries around the world. It may comfort you to know that people in China are as bemused and confused about the future as we are in the United States.
Einar Tangen, formerly from Milwaukee, now lives and works in Beijing, China. He is an adviser to Heilongjiang Province, Hebei Province QEDTZ, China.org.cn, China International Publishing Group, Beijing Baotong and DGI DESIGN. He is also a weekly public affairs commentator for CCTV News’ Dialogue and the author of “The Kunshan Way,” an economic development history of China’s leading county level city. While in Milwaukee, he was a partner at Jackson, Morgan and Tangen, president of E-Tech and a senior vice president at Stifel Nicolaus. He chaired various boards in Milwaukee and was a member of the Federal Home Loan Bank of Chicago. Readers who would like to submit questions or suggest areas of interest can send an e-mail to steve.jagler@biztimes.com.
