SML Study Trip 2018: China and Vietnam

 

 

China is situated in Eastern Asia on the Western shore of the Pacific Ocean and encompasses an area of 9.6 million square kilometers. China’s continental coastline extends along 18,000 kilometers, and its vast sea surface is studded with more than 5,000 islands. More than 1.2 billion people live in China.

Thanks to its reform and opening-up policy, China has become stronger and stronger in economy, science and technology. The nation’s economy has been growing rapidly, with the GDP dramatically increasing year by year. President Xi Jinping closing remark of the meanwhile famous speech at last years’ Davos WEF summit is leading the way: “We Chinese know only too well what it takes to achieve prosperity, so we applaud the achievements of others and we wish them a better future. We are not jealous of others’ success and we will not complain about the others who have benefited. We will welcome them aboard the express train of Chinese development.” China’s economy is gradually shifting from a merely production-oriented to an innovation-led economy. Thus, the Chinese markets will continue to open up and Chinese companies will internationalize as Western companies will explore China as a future market and supply source to an even greater extent.

Vietnam is the easternmost country on the Indochina Peninsula in Southeast Asia. With an estimated 90.5 million inhabitants as of 2014. Vietnam is bordered by China to the north. Its capital city has been Hanoi since the reunification of North and South Vietnam in 1975.

Vietnam was part of Imperial China for over a millennium, from 111 BC to AD 939. An independent Vietnamese state was formed in 939.The nation expanded geographically and politically into Southeast Asia, until the Indochina Peninsula was colonized by the French in the mid-19th century. Following a Japanese occupation in the 1940s, the Vietnamese fought French rule in the First Indochina War, eventually expelling the French in 1954. Thereafter, Vietnam was divided politically into two rival states, North and South Vietnam. Conflict between the two sides intensified in what is known as the Vietnam War. The war ended with a North Vietnamese victory in 1975.

Vietnam was then unified under a communist government but remained impoverished and politically isolated. In 1986, the government initiated a series of economic and political reforms which began Vietnam’s path towards integration into the world economy. By 2000, it had established diplomatic relations with all nations. Since 2000, Vietnam’s economic growth rate has been among the highest in the world. Its successful economic reforms resulted in its joining the World Trade Organization in 2007.

Sixteen students in their final semester at the ZHAW School of Management and Law (SML) embark on this study trip to China and Vietnam following attendance of the seminar “Doing business in Emerging Markets”. The objectives of this study trip are:

  • Experience the Chinese and Vietnamese way of life through real on-site exploration
  • Explore the cultural heritage and learn how to integrate the findings into doing business in emerging markets
  • Understand the buying power of China and Vietnam and its neighboring countries
  • Learn the first steps to expand one’s individual business network beyond Switzerland
  • Expand the horizon for a future professional career.

My heartfelt thanks goes to all organizations, companies and business partners in China and Vietnam who generously invited our SML student group. We deeply appreciate their support.

Moreover, I would like to thank the entire student group who co-organized this trip and in particular the core organizing team Michael Henschel (CEO), Michael Trautmann (COO), Jessica Stocker (CFO) and Nicole Schlierenzauer (CTO). We are all looking forward to this no doubt extremely rewarding and memorable journey.

Best wishes

Dr. Markus Braun

ZHAW School of Management and Law / Zurich University of Applied Sciences

Comming soon!

Work in Progress…

Student’s key takeaways from the Study trip to Brussels

A student group at the European Commission (photo: Florian Keller)

In order to find out and understand what students have learned during the Study trip to Brussels, short interviews with six students have been conducted.

The question that has been asked focused on the key takeaways from the study trip that included visits and presentations of various institutions. The students had the privilege to visit and talk to representatives of the following institutions: SwissCore, European Commission, MedTech Europe, Mission of Switzerland to the EU (Swiss Confederation), Digitaleurope and Economiesuisse.

The following question has been asked to six students:
What are, in your eyes, the key takeaways from the study trip to Brussels? (Things that you have learned, surprised you, or were new to you) Please formulate your answer in one to maximum four sentences.

 

 “I wasn’t aware that the EU was located in Brussels. For me, this trip highlighted how interconnected all of Europe is with all the different collaborating representatives.” –  Emily Reddish

 

 

“The work of lobbyists is very important for different industry sectors. Depending on cultural differences, their work is differently valued. European regulation is difficult and it takes a long time to implement – also, in national laws. On the other hand, it “opens doors” for companies, due to the fact that Europe is a huge single market.” – Martin Müller

 

“I was not aware lobbying for countries’ interest was a thing, and that it was so developed and transparently explained. “  – Clément Herpe

 

“I’ve been surprised by the impact of Brexit. During our discussions, experts always referred to it that it would affect regulations, policies and the EU system. Even though I was aware of the influence, I think speaking with experts made it even more realistic to me, that the EU is going under changes.” – Anne-Sophie Couvez

 

“What surprised me when being in Brussels and listening to the presentations, was that many organizations go there in order to execute their influence and to represent an economy or industry. Francois Baur, who is a lobbyist for Swiss industries, even referred to it as “the dark force”. A lot of decisions are taken in an informal environment, so I got the opinion that networking is part of these people’s daily business.” –  Ara Ankeshian

 

“I was impressed about the concentration of power in Brussels and the number of people involved. Moreover, I have learned how lobbying works and how lobbies represent Switzerland in Europe. Finally, it was important to learn the role that the politics play for the medtech and automotive industries.” –  Sofia Velez

 

To conclude the individual opinions of six students about the study trip gathered through interviews, it can be said that all students were impressed by the power and force of lobbying as well as the institutional constellations that are present in Brussels. In addition, the interconnectivity of each EU country was found as crucial, also when looking at the recent case of Brexit. The study trip surely enriched the knowledge about various European constellations of all students and contributed an important part for the academic development of each individual.

 

By Florian Graf

Why opening a jogging equipment store in Brussels?

Why opening a jogging equipment store in Brussels?

 

During our weekend in Brussels we had time to explore the outdoor areas and the environment surrounding active people in the capital of Belgium. We have been asked to give recommendations to adapt a brand or product in the “jogging equipment” industry. Therefore, we investigate for the opening of a jogging equipment shop in the city.

To get more insights from the sport equipment industry of Brussels and to understand the possible adaptations that the company should make to be successful there, we approached the concept of the Contextual Intelligence. In particular, we made a city tour and looked for places where runners are training, explored the incentives of the city to encourage running and interviewed a successful athlete.

 

Environment

We went on an adventure tour! The impressions were, that there are many beautiful parks and buildings to pass by while running – sightseeing and jogging combined! We arranged an interview with the local expert Luman Kinali @luman_kinali, who provided us with valuable insights concerning the running tracks. He told us, that the most popular place for jogging is the beautiful river canal close to the city center. Furthermore, the city already organized running events like the ‘Brussels Night Run’, which took place last summer. This event aims at bringing people of Brussels, locals and foreigners, together to practice sports and bring the physically, mentally and socially aspects to society.

 

Infrastructure and Conditions

We went a step further and did some online research to gather more information. Brussels is one of the greenest European capitals, offering kilometers of running tracks with plenty of nature. In fact, there are 45 parks suitable for jogging activities. Therefore, Brussels offers everything a runner’s heart wants. However, the drawback about Brussels is the weather, with an average of 200 rainy days during the year.

 

Healthy Lifestyle & Competitors

Despite being famous for Belgian chocolate, beer and waffles…

Brussels also has a lot to offer to people willing to have a healthy lifestyle. We saw a lot of bio shops, healthy restaurants, smoothie places, protein product shops. You can find all global sport brands shops as well as local ones. In the city center, more than hundreds of shops are either specialized on jogging equipment or healthy nutrition to boost a healthy lifestyle.

Our recommendations

Considering the healthy lifestyle of Belgium people, Brussels is a very attractive city for the establishment of a jogging equipment store. The best location for a shop could be next to a park, where most of the runners are training, e.g. selling equipment like smart watches and other wearables. Furthermore, they could sell some rain apparels specially designed for running activities since the weather conditions are not ideal. Regarding advertising, it is recommended to use the local press as well as the dedicated events to inform about the opening of the shops. Also, they can gain advantage of EU initiatives promoting health worldwide to communicate about their opening and localization in Brussels.

Anton, Charlène, Diana, Emanuelle, Milica & Sead

 

Why opening a jogging equipment store in Brussels?

Why opening a jogging equipment store in Brussels?

 

During our weekend in Brussels we had time to explore the outdoor areas and the environment surrounding active people in the capital of Belgium. We have been asked to give recommendations to adapt a brand or product in the “jogging equipment” industry. Therefore, we investigate for the opening of a jogging equipment shop in the city.

To get more insights from the sport equipment industry of Brussels and to understand the possible adaptations that the company should make to be successful there, we approached the concept of the Contextual Intelligence. In particular, we made a city tour and looked for places where runners are training, explored the incentives of the city to encourage running and interviewed a successful athlete.

 

Environment

We went on an adventure tour! The impressions were, that there are many beautiful parks and buildings to pass by while running – sightseeing and jogging combined! We arranged an interview with the local expert Luman Kinali @luman_kinali, who provided us with valuable insights concerning the running tracks. He told us, that the most popular place for jogging is the beautiful river canal close to the city center. Furthermore, the city already organized running events like the ‘Brussels Night Run’, which took place last summer. This event aims at bringing people of Brussels, locals and foreigners, together to practice sports and bring the physically, mentally and socially aspects to society.

 

Infrastructure and Conditions

We went a step further and did some online research to gather more information. Brussels is one of the greenest European capitals, offering kilometers of running tracks with plenty of nature. In fact, there are 45 parks suitable for jogging activities. Therefore, Brussels offers everything a runner’s heart wants. However, the drawback about Brussels is the weather, with an average of 200 rainy days during the year.

 

Healthy Lifestyle & Competitors

Despite being famous for Belgian chocolate, beer and waffles…

Brussels also has a lot to offer to people willing to have a healthy lifestyle. We saw a lot of bio shops, healthy restaurants, smoothie places, protein product shops. You can find all global sport brands shops as well as local ones. In the city center, more than hundreds of shops are either specialized on jogging equipment or healthy nutrition to boost a healthy lifestyle.

Our recommendations

Considering the healthy lifestyle of Belgium people, Brussels is a very attractive city for the establishment of a jogging equipment store. The best location for a shop could be next to a park, where most of the runners are training, e.g. selling equipment like smart watches and other wearables. Furthermore, they could sell some rain apparels specially designed for running activities since the weather conditions are not ideal. Regarding advertising, it is recommended to use the local press as well as the dedicated events to inform about the opening of the shops. Also, they can gain advantage of EU initiatives promoting health worldwide to communicate about their opening and localization in Brussels.

Anton, Charlène, Diana, Emanuelle, Milica & Sead

 

Contextual Intelligence in Bruxelles – Vegetarian Restaurant

Trying to recognize all the relevant contextual factors, when opening up a vegetarian restaurant in Brussels, may be very difficult – if even possible. According to LeVif 5% of the Belgian population is vegetarian and the city of Brussels was considered to be Europe`s Veggie Capital in 2017. Nonetheless, this blog will provide a concise analysis of the vegetarian restaurant market with recommendations based on observations, inquiries, facts, and figures. For the analysis of a successful market entry of a foreign vegetarian restaurant the right positioning, location and main competitors are identified.

 

When Ana and Douglas arrived in Brussels, they were overwhelmed by the attributes of the city. The old town with its bricked houses was home to stylish waffle houses, cafes and restaurants with international menus. Ana and Douglas being from Zurich had really good expectations about what the city has to offer in terms of vegetarian food. However, on Saturday night the expectations of our two vegetarian group members were not fulfilled.

Ana and Douglas wanted to find out more about what the European capital can offer in terms of vegetarian food. Our group members approached locals to find out more about this phenomena and gathered interesting cultural insights. Belgium lies on the Atlantic coast of Europe and the consumption of seafood is deeply rooted in the local culture. Dishes such as mussels, meat stews, and different varieties of fish are among the most popular choices.

 When conducting first-research on the street of Brussels, our vegetarians discovered the famous vegetarian food chain Exki. The chain is represented with 20 stores spread across the whole city. Seasonal and regional products are what make Exkis special attracting not only vegetarian customers but also flexitarians. This creates a highly competitive environment for the town of Brussels.

 

After having visited different neighborhoods of the Belgian capital, our experts fell in love with the Marolles district. There they could find several vintage stores, street art, and markets just a perfect location for a specialized vegetarian restaurant. At the district, Ana and Douglas wanted to get first-hand insight from local establishment owners. Despite the high competition of Exki, the chain is not represented in the district of Marolles. Furthermore, according to ‘Bulletin’, a platform for Belgium’s international community, the number of vegetarians continues to grow steadily since the last decade.

As Brussels is known to be a multicultural city, it is essential to know the customer needs to understand the environment. In this case, the best way to apply and improve contextual intelligence would be to create a partnership with a local business. This way existing knowledge and experience are combined and can help the new businesses to adapt to local cultures. The best recommendation is to collaborate with Veganizer BXL, a local plant-based restaurant consultant. It offers trend-focused, restaurant-specific menu consulting with local insights.

 

Although Exki represents a very high degree of competition, our veggie experts are happy to have found a perfect location where to set up their vegetarian business in the beautiful area of Marolles.

 

 

 

Premium Fashion Brands For Men in Brussels

Premium fashion brand for men in Brussels
Giving the task to find the right setting for a premium fashion brand for men it is important to be aware of the context where they are going to operate. Therefore, the environment of Brussels has been analyzed to identify possible clusters. Furthermore, research has been done to measure market potential for premium fashion brand for men.

Current retail situation
Since the terror attack in 2016, fashion brands got cautious and some even cancelled their expansion plans of opening a store in Brussels city center. What is more, during the last years Brussels had many construction sites which made it even more unattractive for premium brand to locate their stores in the center. However, it has changed in recent months, there are more tourists than ever as Brussels recovered from the attacks. According to Cushman & Wakefield, the main real estate broker in Brussels, there is a positive trend towards opening new stores since mid of 2017. The main cluster where this trend can be observed is at the Boulevard de Waterloo. These findings are underlined by our observation which showed that many premium and luxury brands have a store in this street. Prada just opened a new store with Dior planning to do the same.

Market potential
Brussels is a business hub, as it is a political center. Therefore, many business men frequent the city. Many notable people, like presidents and important statesmen, stay at “The Hotel” during their business trips, which is also situated near these stores. Similar to Switzerland, all stores are closed on Sundays. The products do not have to be adjusted. First hand observations showed that many men wear hats, so the brand could also design such accessories as statement pieces. Furthermore, it advisable for the brand to offer the full business attire, because many of the other stores offer a similar selection. Competition is high in this area, so it can be seen as a cluster. For a premium brand it is important to be visible and present their nice displays

Recommendations
We have identified three locations where the brand could open its store. First, Boulevard de Waterloo which is the location for the most luxurious brands, like Prada, Louis Vuitton and Gucci. Secondly, we found the Galerie de la Port Louise which houses more male focused brands, like Boggi, Father & Sons and Bexley. Thirdly, we identified Avenue Louis, which is one of the main side streets of the Boulevard the Waterloo, where mostly premium rather than luxurious brands are located. Footfall is by far the highest at the Boulevard of Waterloo, therefore, we suggest opening a store to ensures high visibility. As a closing remark the group would like to emphasis that previous research showed that Belgium is one of the most upcoming retail markets in the future. Hence, the fashion brand should enter the market to profit from its growth.

 

The bike sharing market of Brussels – are there already too many sharks in the tank?

Brussels, the capital of Belgium and the European Union, is a people magnet with 1.139 million inhabitants and more than 6.78 million overnight stays of tourists per year. This leads to a high amount of car traffic on Brussels’ streets. For everyone who does not want spend time in traffic at every corner needs to use other ways of transportation – for example a bicycle! Sharing services are getting more and more popular and the bicycle sharing business is no exception for this. But, is it still recommendable to enter the existing market in Brussels as a bike sharing provider? Or are there already too many sharks in the tank?

Big sharks: Tough competition
Several bicycle sharing providers are already established in the market. The biggest market share has Villo. In 2017 their bright yellow bikes got rented more than 1,600,000 times. They offer regular bikes and when walking through the city centre, one passes a rental station every 500 meters. It should be also noted, that the government supports this provider. The first 30 rental minutes are for free, two hours cost for example 3.60 euros. Among the other competitors are also oBike or the electric bike provider Billy. Both providers do not work with pick-up and drop-off stations but offer the possibility to park the bike anywhere, as members use GPS to find the nearest bike.

Jumping into the tank: Existing opportunities for a market entry
Brussel keeps expanding its bike lanes, within the last 5 years the available lanes increased by 67%. The demand is still high, and people enjoy the flexibility that a rental bike provides. Tourists rent it for sightseeing and locals use it to commute faster as well as to contribute to a healthy lifestyle. When asking people at bike stations what their experience is, they comment that they mostly rent a bike on a daily basis. However, they also mention that the existing bikes are heavy, not very modern and Brussel itself offers a challenge due to its uneven paths. Additionally, sometimes the bikes pool all at one station while others are empty. Thus, a new provider could position itself as an electro bike sharing service with modern bikes and an optimized system of regulating the bikes at the stations. Offering additional safety equipment like helmets could help to differentiate itself from the competition.

A too crowded tank: The final market entry recommendation
After researching the bicycle sharing market of Brussels and having a look at several renting stations throughout the city, one has to come to the conclusion that a market entry for a new provider is not recommended. The existing competition is hard and well established. Others have tried and not succeeded. For example, the Hong Kong based provider GoBee Bikes stopped its service in Brussel after only three months as their bikes got “maliciously and severely damaged” and all the profit went into repairing the bikes. Thus, a bike rental provider should keep looking for “a bigger tank with less sharks”.

Public street furniture in Brussels

How do you enjoy a park or sight in Brussels? Most of the time with calmness and sitting on a bench, at a picnic table or next to a fountain.

In 1964, Jean-Claude Decaux invented the concept of “street furniture”. The main idea was to give a free access to the well – maintained street furniture to a society. However, in return, the advertisements should have been placed on such structures.

From the beginning, street furniture attracted advertisers because it gave them the opportunity to spread the commercials in the most popular spots.

The decisions on street furniture are made by local municipal governments in cooperation with private landowners. Therefore, the process of business entry might be over bureaucratized and time consuming.

Something stands out in all the parks and green areas, as well as sights in the cities of Europe. More and more places are decorated with street furniture.

The most known types of street furniture are:

– Benches
– picnic tables
– Fountain
– Sports area
– sun loungers

However, we will focus on benches in this blog. Brussels is famous for being especially attractive tourist destination due to its historical heritage and architecture. Yet regardless of the attractiveness of the place you cannot walk around the whole day. That is where benches enter the game. After two days spent in Brussels, the following findings can be drawn.

There are a lot of tourists and locals in Brussels. The city of Brussels is one of the 19 municipalities of the Brussels-Capital Region and the capital of the Kingdom of Belgium with 176,545 inhabitants in the official city area. However, the urban settlement area extends beyond the city of Brussels to the Brussels-Capital Region with a population of around 1.1 million. Furthermore, there are approximately 5 million tourists every year. Therefore, they need places to sit down and enjoy the beautiful sights of the city. Nevertheless, we noticed that there are not many public benches in the city center. People are sitting on the ground and stairs.

Moreover, overall impression about the already existing infrastructure was rather skeptical. Since many benches in the central park and other central spots were either damaged or in poor conditions, they are hardly usable.

 

Another important finding concerns competition. With 250 employees JCDecaux is clearly one of the largest companies in street aesthetics in Brussels. For more than 50 years the company manufactures various products of street furniture.

Today, JCDecaux Belgium offers advertisers a vast range of Out-Of-Home (OOH) solutions:  2m² urban furniture, public bikes in Brussels, billboards, ‘Insert’ frames targeting pedestrians, ads in Brussels buses and trams, and a vast range of offerings in the Brussels metro, the country’s largest airports, shopping malls and the lobbies of Carrefour.

Considering the shortage of benches in the city center, their bad conditions nearby, no advertisements around the benches, it is a promising chance for a Swiss company to enter the street furniture market. With the Swiss quality they can contribute a higher standard to the public sector. This goes in line with an opinion of the young people who were interviewed in the street who indicated that they would like to see more interactive public furniture like in other capital cities (musical benches in Warsaw).

According to the Brussels Times article from April 2016, there are plans how to increase the public space and also the city experience. We noticed a lot of construction works in the city center. These areas are supposed for pedestrians in future. Therefore, there is an opportunity for a Swiss company to enter the market, starting with the city centre.

Illustration source: The Brussels Times.

High-Quality Windows in Brussels

Windows are one of the critical components required in constructing sustainable building designs. As most of the energy flows in and out of a building through windows, technological innovation, intelligent designs and isolation have become major criteria for window production. Windows nowadays have provided comforts in terms of heating, cooling and lighting for better indoor environments. Moreover, sustainability has become a major topic in the society. Therefore, window manufacturers have spent their research and development to meet customers’ expectations. In addition to the environmental concerns, there’s an increasing number of regulations. For example, the European Union set common standards for all member states regulations.

Brussels, as the capital of the European Union, is a cluster for international institutions such as the European Commission, the European Parliament or UNICEF. These institutions are aiming to have a front-runner position in terms of modernization and sustainability. The architectural challenges in Brussels are to include modern design within the existing the classical environments. This creates a unique city-center and poses a market potential for window manufactures. There are a lot of construction sites in Brussels giving a better opportunity to enter the market specially these large buildings such as the European Parliament and the European Commission. The biggest European players in this industry sector are Jeld-Wen, Pella and Andersen.

  

In terms of complying with the Brussels region, the current standard practice is that all window must be at least. Ordinary double glazing (Low E double glazing in Brussels Region) with window U-Value of 2.5. Comparing to the European market average, Brussels Region has set a higher standard than other countries.

As a swiss window manufacturer thinking contextual intelligence is crucial when entering a market such as Brussel. Reasons for that, are the high expectations of the architectures and its clients as well as the special purposes of buildings in the city.  Considering the need of public announcement for public construction, the bar is raised to be awarded the contract.

  

Having a growing city with many old buildings that do not meet the minimum requirements in regard to ecological standards, there is great potential for a company that meets both, the capability to produce high quality windows, as well as being able to keep up with the expectations to be innovative and to deliver to clients in time. This has to be kept in mind, considering the high amount of governmental institutions and NGOs being present in Brussels. Hence, a good place to set up a sales office would be in the middle parliamentary area.

As a Swiss provider of high-quality windows, not being part of the European Union, the need to be flexible and adapt to given circumstances in the long-term is pivotal. Moreover, the decision-making process of such clients may take several months, or even years.

Concluding, the market itself is very promising for a manufacturer of large high-quality windows, considering the high purchasing power and demand. Nevertheless, a market entry is challenging since Swiss companies face the political hurdles of not being an enterprise from a member-state of the European Union. To solve this issue, the network model by Johanson and Mattsson should be implemented in the internationalization strategy.