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Blogging Beijing

The 2008 Summer Olympics will punctuate three decades of development and test China's global legitimacy. They've already transformed the way millions of people think and live. Seattleite and Fulbright researcher Daniel Beekman brings you Beijing.

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February 3, 2008 2:40 PM

Casing the competition

Posted by Daniel Beekman

The 2008 Olympics aren't just an event. They're an international brand.

That's why the Chinese are cracking down on fake Olympic merchandise, why 60 corporate sponsors - including Adidas, Volkswagen and GE - bought in years ago at US$40-100 million each, why organizers expect to net US$16 million - after shelling out US$2.1 billion to stage the Games in Beijing.

(Note: China has spent nearly US$40 billion to retrofit Beijing ahead of the Olympics. The US$2.1 billion above refers to the city's 16-day operating budget.)

Consumers everywhere know Asian brands, like Honda (Japan) and Samsung (Korea). As for China's leading firms... Heard of Li Ning? Or

This August, a Beijing Olympic Emblem will invade the United States - plastered on soda cans, splashed over the Internet.

"The idea of Chinese companies going global was laughed at ten years ago," said Jonathan Tang, an International Marketing manager with Beijing's Cheung Kong Graduate School of Business. "Now there's Haier, Lenovo, Morgan Stanley."

(Note: In December, Morgan Stanley, one of Wall Street's biggest investment banks, sold a US$5 billion stake to the China Investment Corporation.)

A number of Chinese corporate giants - including some Olympic sponsors - are preparing to launch efforts overseas. At the same time, scores of established multinational brands are set to assault consumers here during the 2008 Games.

Beijing's Olympics will highlight what four University of Washington Masters in Business Administration students already know: in global business, understanding China has become essential.

According to Carrie Pederson, one of the MBAs, "China's influence on the world economy is undeniable."

Pederson, Josh Holt, Adam Martin and Ryan Cassidy traveled to Beijing last month on behalf of the UW Foster School of Business. They won top honors at China's first international case competition, organized by Cheung Kong.

"The team gained first-hand experience of China," said Dr. Ming Fan, the students' coach and a Chinese-born UW professor. "Every year, thousands of Chinese students, managers and government officials come to the U.S. to learn about U.S. systems and the U.S. market. American business leaders, entrepreneurs and MBA students may need to do something similar. The trip was extremely valuable for our team members."

Eight teams - six from the U.S., one from Singapore and one from China - attended the two-day 2008 East-West MBA All-Star Case Challenge. Never before had American and Chinese graduate students met to tackle real-world business problems.

Each team was given one month before the event to prepare. Their task: to counsel China's biggest brewer, Tsingtao, on how to woo American drinkers.

"We saw an opportunity," Tang, of Cheung Kong, said. "The competition filled a hole. There is no other event bringing people together like this. Beijing's most respected schools - Beijing University and Qinghua University - have been slow to engage, a bit cautious. But we're a new school. We think our MBAs are as good as those in the U.S."

Cheung Kong caters to Chinese entrepreneurs interested in expanding globally, and advertises itself to foreigners intent on collaborating with China. Hong Kong business magnate Li Ka-shing - whose rags-to-riches life story is admired across Asia - founded the school in 2002.

"He thought China deserved a high-quality, private business school," Tang said. "So many Chinese students seek degrees abroad."

In the course of their winning presentation, Fan's team advised that Tsingtao re-brand its beer sold in the U.S. The UW MBAs suggested 'Tao.' The team had conducted street market research, polling drinkers in Seattle's International District and Belltown.

German colonists began brewing Tsingtao in 1903. Its current logo features a famous pier on the city Qingdao's (Tsingtao is an older spelling) ocean shore.

Check out the UW team's re-design below.

"We wanted to make it easy for Americans to pronounce, so we chose Tao," Pederson, who has worked in Greater China for eight years, explained. "We used red to associate the beer with China, and we kept the pier and established date because consumers - more and more - want to know the story behind the products they're buying."

Over 400 curious spectators showed up for the case finals inside Beijing's Grand Hyatt Ballroom.

"We were really pleased with the turnout," Tang said. "Chinese people want to know what the MBA is all about - it's a new degree here. Plus, there are a lot of people in Beijing interested in business."

"The competition was quite an eye-opener for many in the audience," said Fan. "The professionalism of our team and the other U.S. students, their poise, excellent communication skills and the analytical and strategic angle of their analysis made a deep impression."

Fan's students fought fatigue - after arriving in Beijing, they were each assigned to new a 'mixed' team and asked to prepare a second, unrelated presentation. One 'mixed' team worked through the night. Cheung Kong's organizers hoped to foster networking and cultural exchange.

"With the Northwest's location on the Pacific Rim, ties with China are very important," Pederson said. "China is Washington state's biggest export market, with exports totaling $6.8 billion in 2006."

International sponsorship laws kept Beijing's Olympics more or less out of the spotlight. Although Tsingtao will sponsor the Games in China, a foreign beer-maker will fly the 2008 Olympic flag overseas.

Nevertheless, both Fan and Pederson were impressed by what the Games have wrought in Beijing.

"China has changed a lot in the past decade," Fan said. "The pace of change is really amazing. Compared to China, the urban landscape in the U.S. is quite stable. If there were an (Alaskan Way) Viaduct in Beijing or Shanghai, the government would have probably replaced it with a tunnel without much public consultation."

China's big show subtly colored China's first international case competition.

"The Games helped us attract American schools," Tang said. "This is the year to come to Beijing. We talked about the energy here, and the construction. We talked about what the Olympics might be like."

UW's team ended their Tsingtao presentation with a few recommendations. They proposed that the firm target high-end Pan-Asian restaurants. And they encouraged Tsingtao to "leverage buzz about China" created by the 2008 Olympic Games.


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