'China Lab' member students and Exception de Mixmind's staff. Photos by Liang Qiwen

GUANGZHOU: As China is redrawing the economic map of the world, many local companies are making a foray into the international market. However, some of them face difficulties in tapping the global market due to lack of vision and adequate knowledge about the market.

Twenty-four MBA students from the Massachusetts Institute of Technology (MIT) in the US have come to China and are working with local MBA students to find solutions for these companies under a program called "China Lab".

The program covers dozens of companies based in Beijing, Guangzhou and Yunnan province.

"In Guangzhou, we've chosen three companies in three different fields including fashion, hotel and high-tech," said Jonathan Lehrich, a leader of the program. "The companies have become successful icons in their relevant fields, but they all need expertise in their attempt to set foot on the world market or change their business models."

Six MBA students of MIT's Sloan School of Management and eight students from international MBA center of Guangzhou Sun Yat-sen University's Lingnan College are involved in the program. They will spend two months doing research on the companies' state of affairs and offer proposals on the right direction for them in May.

Exception de Mixmind, a Guangzhou-based fashion company, has been doing well in the local market. Its elegant, stylish designs and extraordinary quality have been well accepted by the local market and the firm is now one of the top brands in the country.

However, the company wants to set its foot on the international market.

"We held a fashion show in Paris last year to get a feel of the foreign market," said Mao Jihong, president of the company. "Our fashion show was very successful. The outcome made us more confident about our products' international market prospects."

In China, Exception de Mixmind is a high-end brand. Each piece of its garment costs around 1,000 yuan (US$143).

"We want to maintain our brand's high-end image in the European and US market," Mao said.

Mao and his staff members think their fashion design, that uses lots of flax, gives their garment an air of elegance even though it's casual-looking. The design has also an artistic look, the company feels.

But, how does the product sell in the global market? What will be its unique selling point?

Theodore Chan, a "China lab" project member from MIT, said: "You must listen to the market's voice."

He also added that "you must know whether European and US customers like the garments' style or not. If they don't, the design has to undergo adequate changes to adapt to the market's preference".

The company faces another challenge as it seeks to enter the high-end fashion market in the western world. How will it make the western customers convinced that the expensive clothes designed in China are worth buying?

The program fellows said the company should attach more importance to its market image and it has to give adequate emphasis on promotional strategies to tap the global market.

Another company, 7Days Inn, is a low-fare hotel group that was set up in 2005.

The group's start-up funds came from American venture capital funds and Guangdong Today Investment Co Ltd. Warburg Pincus, an American Investment Group, joined in November 2006. Then in 2007, the group got US$95 million from German Deutche Bank and US Merlin Investment Group.

In the past two years, the group has opened nearly 200 hotels across the country. It plans to list in Nasdaq later this year.

The company intends to have more than 1,000 hotels by the end of 2010, and plans to make a foray into the world market at the right moment.

"In order to boost staff's enthusiasm for work and shape a very free working condition, I give my staff and managers lots of freedom to make decisions," said Zheng Nanyan, CEO of 7Day Inn Group.

This strategy has been very successful in the past three years. The 7Day Inn Group's hotels maintain 95 percent occupancy. The group has more than 2,000 staff.

"However, the free management probably will encounter difficulties when the company's scale becomes much bigger in the future," Lehrich said.

"Our work is to find the best way to maintain free working condition but tighten its management structure at the same time," he added.

Vtron Technologies Ltd is a Guangzhou-based high-technology enterprise, engaged in design, manufacture and sales of high-resolution digital display systems. Vtron's systems have been used by a wide spectrum of industries and government agencies for telecommunications, power utilities, traffic management, process control, information displays, simulation, and military applications.

"Now we intend to expand Vtron's product application into the education industry," said Tang Minchao, president assistant of Vtron.

Vtron's research and development team is working to allow Vtron's centralized information systems to be used by schools as multi-media teaching facilities.

However, Vtron's products are sold at a very high price. For example, an 80-inch digital display system is sold at one million yuan (US$143,000).

"They should lower the prices so as to cope with the market," Lehrich said.

The China Lab program will provide Vtron expertise from the education market in China and internationally, competitor analysis and operation models, and a product model solution plan for Vtron, he said.

"This program is a collaborative work," said Zhang Yanmei, assistant dean of Sun Yat-sen University's international MBA center. "This program can broaden local company's vision as well as train American and Chinese MBA students' business management skills."

She hopes the program can continue on a year-by-year basis, so that more companies and MBA students can benefit.

(HK Edition 04/22/2008 page4)