This paper shows the results of a survey on the China activities of Swiss manufacturing companies up to 4000 employees, conducted by two students of the University of Applied Sciences Northwestern Switzerland in 2003.
Throughout the past three years, China has become the number one country for investment, attracting more FDI than the USA. How do Switzerland’s traditionally export-oriented manufacturing companies see this situation? How do they react? Do they buy Chinese companies?
New laws allow foreign companies to acquire Chinese enterprises. Through telephone interviews we collected information on the current activities and future plans of 37 Swiss manufacturing companies in China. Out of this sample we selected 18 firms to learn more about their China strategies. We found 6 companies which have experience with M&A in China.
The surveys revealed the following key findings:
The Chinese market is significantly important for Swiss exporting but also for Swiss importing manufacturers. At the same time, it is a very challenging market which requires profound preparations and research before entering and careful monitoring and supervising when expanding.
Especially in the machinery and equipment field, the Swiss manufacturing industry is a classical export-oriented industry with R&D and production done in Switzerland, deriving out of the high tech industries which originate from the Swiss precision watch cluster. Many companies entered Chinese market in order to export their products or in order to source parts in China. As in many fields of the manufacturing industry China is still 1 to 3 generations behind Western standards, some companies developed special products for the local low-end market which they also produce locally. High-tech products are still produced and developed in Switzerland, partly to protect crucial corporate know-how, but also because Switzerland offers and optimal surrounding for this industry (ETH, EPFL, industry cluster)
For more sophisticated and established companies we saw a trend to have highly independent business units for the local Chinese market in China while high-end products remain in Switzerland and are exported to Chinese customers.
Table of Contents
- EXECUTIVE SUMMARY
- INTRODUCTION
- Goal of the survey
- Structure of the paper.
- I. GENERAL PART
- Foreign Investment Forms in China
- FDI - New way to introduce Foreign fund in China
- Definition of Mergers & Acquisition (M&A)
- Competitiveness of Manufacturing Industry
- Home base - Switzerland
- Manufacturing Industry in China
- Trade of the Swiss manufacturing industry with China
- II. SURVEY PART
- Methodology
- Sample Profile of Swiss Manufacturing Companies
- How we defined our sample
- Definition our sample companies
- Profile of the interviewed companies.
- SURVEY A-INDUSTRY OVERVIEW
- Legal forms
- Importance of the business in China
- Business activities in China
- Years active in China
- Profitability of investment in China
- Expansion plan in China for the coming 5 years
- Summary of Survey A - Industry overview
- SURVEY B - CHINA STRATEGY
- Consulting
- Market entrance
- China Strategy
- Overall corporate strategy: IR-Grids
- Business experiences in China
- Summary of Survey B - China Strategy
- M&A AS A STRATEGIC TOOL IN CHINA
- Attractive manufacturing industries for M&A
- Worldwide M&A experience
- Reasons against M&A in China
- Reasons for M&A in China
- Requirements for M&A in China
- Recommendations for M&A in China
- China strategy of M&A experienced companies
- Summary of the M&A focus part
- III. COMPARISON TO SOUTHERN GERMANY
- Foreign direct investment (FDI) in China and its various forms
- The role of M&A as a strategic tool for Swiss companies in China
- The business environment and challenges faced by Swiss manufacturing companies in China
- Comparison of the Chinese market to Southern Germany
- The impact of Swiss companies on the Chinese manufacturing industry
Objectives and Key Themes
This study aims to analyze the activities of Swiss manufacturing companies in China, with a special focus on mergers and acquisitions (M&A). It investigates the motivations, challenges, and strategies of these companies in the Chinese market.
Chapter Summaries
The first part of the paper provides a general overview of foreign investment forms in China, including a definition of mergers and acquisitions (M&A). It then explores the competitiveness of the Swiss manufacturing industry in China, considering factors such as the home base in Switzerland, the manufacturing industry in China, and trade between the two countries.
The second part of the paper focuses on a survey conducted with Swiss manufacturing companies in China. It presents the methodology used, the profile of the sample companies, and details on the companies' legal forms, business activities, profitability, and expansion plans.
The third part delves into the specific strategy of Swiss companies in China, analyzing consulting, market entrance methods, and overall corporate strategies. It also examines business experiences and highlights the role of M&A as a strategic tool in China.
The fourth part of the paper compares the Chinese market to that of Southern Germany, considering the similarities and differences in terms of business environment and opportunities.
Keywords
The core keywords and concepts explored in this study include foreign direct investment (FDI), mergers and acquisitions (M&A), Swiss manufacturing companies, China, competitiveness, business strategy, market entrance, profitability, and expansion plans. It also delves into key themes like the challenges and opportunities of operating in the Chinese market, the significance of M&A in achieving strategic goals, and a comparison of China's business landscape to that of Southern Germany.
- Citar trabajo
- Juergen Simon (Autor), Chun Shi Xu (Autor), 2003, Survey on Activities of Swiss Manufacturing Companies in China with special focus on M&A, Múnich, GRIN Verlag, https://www.grin.com/document/14138
