THE STONE LION JOINT VENTURE BLESSING, EMEKA, KEVIN, LEV, MAURO, MINDY, TRIKA & YASIN

CURRENT SITUATION

China has a big economic ambition and technical skills. There is a lack of Authority. Emotion and trust are important values

Taking future objectives of the government’s interest will unlock future possibilities

Technically-versed executives take the lead in discussions. Meetings

Access to finance and other needed resources will become easy in the takeover process

International management, considerable management change and institutional transparency is important

Many takeovers of China in Western firms (e.g. takeover of Volvo by Chinese Company Geely)

China's largely state-controlled firms already account for over 10% of global stock market value.

SUMMARY – CLIENT SITUATION

European engineering construction company

Reputation for innovative ideas

Successfully diversified into environmentally-sound ‘turn-key’ operations in Europe & South America

Looking for imaginative ideas for market entry project into China

CURRENT MARKET ANALYSIS

(Statista, 2019)

OUR APPROACH

We look at following dimensions:

Political Dimension = Political Agreement for our market entry

option

Economic Dimension = Planning of our investment in the

procedure and estimation of possible

returns

Social Dimension = Consider the local social and cultural conditions in China and implement an

International Business Mindset.

Technological Dimension =

Implementation of our innovative

technologies in the company in China

Environmental Dimension = Use our

groundbreaking technologies to

ensure sustainability in China (e.g. plastic

bricks).

Legal Dimension = Legal Agreement for

our market entry Option

BUSINESS-MODEL ENGAGEMENT

The type of business entity you create affects both your role within the company and how

the company operates. Partnership (JOINT VENTURE) Partnerships are similar to sole proprietorships, though they are owned and managed by

two or more individuals instead of one. The owners may divide duties among themselves, putting one in charge of finances while the other is in charge of day-to-day operations, for example. For a general partnership, there is no filing to create a separate company and the same legal liabilities faced in a sole proprietorship are also faced in a partnership. Contracts between the partners may shift the liability to certain members within the partnership, but there is no way to shift the liability to the business itself.

JUSTIFICATION FOR BUSINESS MODEL

Market Entry Joint Venture • Joint Venture with a state-owned Company - China State Construction Company - high global stock

market value

• JV not only offers opportunities for expansion but also brings both parties’ valuable skills together to carry out projects effectively and efficiently

• (...) foreign contractors and consultants failed to communicate with local governmental departments and misunderstood clients because they were unfamiliar with local procurement methods, industrial practices, Chinese working methods and thought processes

• (Gale & Luo, 2004)

PRODUCT UNIQUE SPECIFICATIONS

New Construction Technology:

Mobile Technology Drones Building Information Monitoring (BIM) Virtual Reality and Wearables 3D Printing Artificial Intelligence

New materials 3D printing Prefabricated prefinished volumetric construction (PPVC) Cement technology for construction that absorbs CO2 Bricks built from recycled plastic

FINANCIAL STRATEGY EU-China 2020 Strategic Agenda for Cooperation EU Cooperating with China to support effective multilateralism and fight climate change The EU's and China's shared commitments and interest in global sustainable development

and the 2030 Agenda present opportunities for closer cooperation, including in third countries.

The gross output of the construction industry in China has increased from USD $0.21765 trillion to USD $2.902 trillion dollars, up by 1160% (China Statistical Yearbooks, 2019).

However, the construction industry is still a traditional industry in China, characterized by low efficiency, high pollution, large capital requirements, and an unreasonable structure, hindering its development.

(Gao, Tang, Ren, & Cai, 2019)

CONCRETE NEXT STEPS

Implementation Next steps  Set a Clear business objectives communication arrangements between organizations/teams financial arrangements protection of your interests, eg trade secrets day-to-day and strategic decision making

Negotiate whether the party can pursue other business during the joint venture

Business plan/Marketing plan/ cashflow projection Consult your employees to find out their feelings about a joint venture  Revenue Streamline Existing customers and suppliers, competitors and professional associates

as partners

LONG TERM SUSTAINABILITY

Long term sustainability - Create CSR to support Chinese community to develop a political relationship-  Technology Transfer from EU to China -  Associate with Chinese University to educate on the new EU construction Technology / Creating Ambassadors of the companies / pre training / sponsoring Advance Studies / Creating an R&D platform to accommodate innovation - Business Expansion back in Europe and other continents - Creation of employment - China to continue investing in housing & construction platform- Sustainability The Chinese leadership realizes the importance of controlling pollution, developing a sustainable economy and protecting the country’s ecosystems

REFERENCES

Bhasin, H. (2019, March 9). SWOT analysis of China Country - China Country SWOT analysis. Retrieved from https://www.marketing91.com/swot-analysis-china-country/

China Civil Engineering Construction Corporation. (2009, July 24). Retrieved from https://en.wikipedia.org/wiki/China_Civil_Engineering_Construction_Corporation

European Commission. (2019). EU- China a strategic outlook. Retrieved from https://ec.europa.eu/commission/sites/beta-political/files/communication-eu-china-a-strategic-outlook.pdf

Gale, A., & Luo, J. (2004). Factors affecting construction joint ventures in China. International Journal of Project Management, 22(1), 33-42. doi:10.1016/s0263-7863(03)00012-7

Reuters. (2019, July 18). China's debt tops 300% of GDP, now 15% of global total: IIF. Retrieved from https://www.reuters.com/article/us-china-economy-debt/chinas-debt-tops-300-of-gdp-now-15-of-global-total-iif-idUSKCN1UD0KD

Trading Economics. (2019, October 14). China GDP | 2019 | Data | Chart | Calendar | Forecast | News. Retrieved from https://tradingeconomics.com/china/gdpWikipedia. (2004, September 7). Lion-Eating poet in the stone den. In Wikipedia, the free encyclopedia. Retrieved October 14, 2019, from 

https://en.wikipedia.org/wiki/Lion-Eating_Poet_in_the_Stone_DenWorld Business Council for Sustainable Development. (2009). The cement custainability initiative: Cement industry energy and CO2 performance “Getting the

numbers right”. Retrieved from http://docs.wbcsd.org/2009/06/CementIndustryEnergyAndCO2Performance.pdfXinhua. (2015, March 28). China unveils action plan on Belt and Road Initiative. Retrieved from 

http://english.www.gov.cn/news/top_news/2015/03/28/content_281475079055789.htm