Contact: Madonna Jarrett
Deloitte Touche Tohmatsu
Global Corporate Communications
+852 9686 1660

Shanghai, 1 September 2004: Going global is not all gold but the medals are there to be won – and not just the silver and bronze, according to Jerry Leamon, Deloitte’s Global Managing Partner for Clients and Markets. Two key issues facing businesses going global are having real knowledge of the foreign market and the best preparation possible.

While visiting Shanghai for Deloitte business, Mr Leamon outlined his concerns about companies not achieving their true potential when entering foreign markets, due mainly to a lack of thorough preparation.

Mr Leamon said, going global is like preparing for the Olympics.  “Liu Xiang didn’t win gold by chance. He had a long term plan, selected the right coaches and trainers, understood his competitors, knew the height of each hurdle and remained committed. Only then did he clear 10 out of 10 hurdles to become an Olympic champion.”

Mr Leamon said, “the same goes for businesses entering the global arena. They need to be focused and disciplined. They need a long term plan, to know what they want to achieve, consider the strategic benefits (of going global), asses the risks and identify the challenges and competencies needed.

“Whether the global move is through an acquisition, a joint venture or other arrangement, it must be a strategic decision and there are tactical implications. Those entering into such activities need to undertake careful market and competitor analysis and have a clear time horizon as well as an appetite for change. In doing so their chances of success are greater.”

Statistics show that China is one of the preferred destinations for foreign direct investment and it has experienced a 36 percent increase in Fortune 500 representation, with four new companies making the list this year. The Chinese government is implementing infrastructure change to help its national businesses become global players and achieve its target of 50 Fortune 500 companies.

“Companies are winning by going global - they are making the Olympic squad. However there are more gold medals to be won, if businesses plan carefully,” Mr Leamon said.

The challenges don’t stop with successful market entry. Businesses must continuously evaluate and update their operations and optimize their business processes to remain competitive.

Mr Bowie, CEO Deloitte China said, “just as Olympic athletes need to maintain their fitness, businesses must maintain and enhance their fitness – particularly in the rapidly developing markets such as China.

Chinese companies need to remain competitive even if they are not looking to expand into foreign markets, as the foreign competition has already arrived in China.”

Deloitte has seen growing demand for its business optimization and gateway services. Its gateway services provides a holistic approach to businesses going global, whether it be to large SOEs or a multinational with various joint ventures and alliances restructuring to make its operations more efficient and in synch with global expansion plans.

In the current environment, retaining its consulting business is proving to be a market differentiator for Deloitte.

Mr Chris Lu, Managing Partner Deloitte Eastern China Region said, “businesses are asking for tailored solutions from a one stop shop. Having kept our consulting business is proving a differentiator for Deloitte. We are in a unique position to offer this integrated service to companies going global.

“There is no question that the smart Chinese companies are looking at how best to get ready for global expansion. This will support their long term profitability and enduring champion status.”