Shifting Sands

Business model

Norman Sze from Deloitte China says adapting global practices to the local culture is crucial for any sort of consulting work. [Photo/China Daily]

While there has been a sudden spike in the number of Chinese companies seeking to adapt and understand global business practices, foreign companies are actually pushing to do the opposite.

"A lot of foreign companies that have come to China initially came, if you like, with their overseas business model and have then found that it helped them to establish in cities like Shanghai or Beijing," Knight says.

"But when they started to try to scale and build their business, particularly when they moved out of the larger cities into the second- and third-tier cities, they found it very hard to compete with the local businesses and needed to radically change their business models."

The result is that multinationals began calling on the experienced premium consultants once again to help shift and sort a workable business model to acclimatize their companies to a more Chinese business environment.

"We're helping Chinese companies understand how they can be successful as national and international players and we're helping foreign companies understand how they can be successful in the local market - they're quite parallel," he says.

In addition to helping foreign multinationals step deeper into China's untouched markets, as the economic situation in the US and Europe continues to flutter premium consultants have also been charged with the much more traditional task of increasing productivity.

With increasing pressure back home and rising service prices in China, several of China's oldest multinational companies are increasingly feeling the need to cut costs.

"Costs are increasing fast, particularly labor costs. At the same time the global economy is looking very uncertain and competition is increasing inexorably in China," Knight says.

External pressures aside, China still holds the key for companies and consultants alike. With an ever-fluctuating economic atmosphere, it is the untapped markets on both sides of the oceans providing the much-needed boost.

Acting as a bridge to the unknown, the world's top consultants are providing the know-how and strategy to help both sides succeed, Knight says.

Li Aoxue contributed to this story.

toddbalazovic@chinadaily.com.cn