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Takeaways from the 2013 International Study Tour

TMMBA Student Anne-Marie Scollay traveled to Dubai and Abu Dhabi this month on our International Study Tour.  Below are her takeaways and final thoughts from the trip. Read more about Anne-Marie’s journey on her personal study tour blog: http://outlookvfr.wordpress.com/

As I begin my journey home to Seattle, I find myself reflecting over the past two weeks in this beautiful and fascinating country. For so many reasons, this trip has been unlike any other international trip that I have taken previously – traveling with classmates, working with a knowledgeable guide, and having access to local businesses that were willing to share their time and transparently share information to a group of MBA students from the USA.

Depending on who you talk to, the UAE has a population of between 8-9 million people, of that only about 1 million are Emirati. What is so compelling about those figures is that the Emirati are the minority in their home country. While protective and proud of their own culture, they also recognize that in order to keep the country running with so many expats that there must be some concessions made. And so, despite the fact that this is an Islamic country, it is possible to drink alcohol, consume pork, and wear what one likes. In return, the expectation is that expats behave respectfully and follow the law (deportation is one very likely outcome for those expats that break the law).

The cities we visited clearly depicted contrasts: haves and have-nots, tradition and modernization, Emerati and expat, religion and commerce, and many more. And yet, somehow, it works here. The national leadership recognizes that to become a global player, the country must maintain both a stable economy and political environment. So while there is turmoil in the region, the UAE has maintained stability and as a result continues to attract expat workers and foreign investment to continue its economic advancement. Dubai and Abu Dhabi are cities under construction – neither of which is standing still. I am certain that in just 6 months the skyline will again look different and that there will be new marvels to behold.

At the close of this trip, I realize that as well-traveled as I had previously considered myself, there is still so much more about the world for me to learn. This trip has expanded my perspective in so many ways – about the world that I live in, my own perspectives and stereotypes, and the critical importance of truly listening and learning from each other. I leave the UAE humbled by how much I have learned in such a short time and hopeful that I will have the opportunity to return again soon.

TMMBA visit to A*Star in Singapore

2012 TMMBA International Study Tour guest blog by Ben Morales & Stephanie Casey

Similarities and differences to a company visit in the US

We would compare the A-star campus visit to a company visit in Silicon Valley.  Silicon Valley is home to many of the world’s largest technology corporations, and known for world-class engineering and product development.  A-star is similar to Silicon Valley in that it has a focus on research and development for biomedical sciences, physical sciences, and engineering and has established itself as the premiere research institute in Southeast Asia.  Dr. Seng was able to paint a broad landscape of how A-star fits into the global view of premiere institutes such as Carnegie Mellon, but also zero in on how it is influencing Southeast Asia and its role in Singapore.  This perspective was unique to Singapore and very different from a company visit in the US.

A*Star’s global mindset

In my observation, A-Star is key to the Singapore government’s strategy on how it will continue to grow its economic engine—via bio-tech and high level engineering activities.  That said, the mindset of A-Star is to recruit and partner with the best minds and companies around the world.  They recruit heavily from all over the world, and even though they lose some of Singapore’s brightest minds to Stanford and Harvard, Dr. Seng works diligently to bring those students back after their education.  Additionally, Dr. Seng pointed out that Singapore is within a six-hour flight of two-thirds of the world’s population.  This statistic was incredibly powerful as we realized China and India account for a majority of the world’s population, and that an organization like A-star can have an even greater advantage when they are geographically positioned so close to these burgeoning populations.

The company culture

Given its engineering and scientific focus, the A*Star culture appears to be an entrepreneurial one.  One in where there is a high level of collaboration, experimentation and risk taking.  That being said, there is a lot of pressure to produce.  A lot of money is flowing through the institution so it’s imperative that they launch or license products and file patents to sustain the organization.

Doing business in Asia

It appears that doing business in Asia is less complicated than I originally perceived.  The economic growth in the Asian market (at least in Singapore and China) appears to be fueled by big brands entering these markets without hesitation.  Initially these companies entered these markets through joint-venture licensing deals and evolved to wholly owned foreign entities (WOFE’s).

The growth potential and relative immature nature of the China markets has some companies (i.e. Godiva) making significant investment plans based on performance of like brands vs. the typical quantitative analysis usually performed in other mature markets.

Tianjin Economic Technological Development Area

Guest post by Sumedha Kukreja, Class of 2012 International Study Tour participant

天津经济技术开发区TMMBA student at TEDA during the International Study Tour

On March 19th 2012 morning, we took a 30 minute bullet train ride to Tianjin. TEDA is about 38 km away from Tianjin downtown. It is considered an important part of the Tianjin Binhai New Area.

TEDA stands for “Tianjin Economic-Technological Development area”.  It was established in 1984. TEDA is divided into 3 industrial parks: TEDA industrial park, Yet–sen Scientific and Industrial Park, and Microelectronic Industrial Park.

We were met by Jianning Li (representative for Chicago), Peidong Lin (representative for Dallas), and Yu Xiaoran (project manager for section of Europe and America).

Before TEDA was marked for development, the area was used to harvest sea salt. Most of the development has taken place in last 30 years. Motorola was the first company to set up a factory in this area. By the end of the year 2010, about 4870 foreign funded enterprises from 74 countries were represented. In the first 10 years there was 25% growth in GDP. In recent years growth has slowed down as the cost of doing business in TEDA has increased. As of the end of 2010, total investment in this area has been over $62.2 Billion. Progress of TEDA has been boosted by its superior geographic location. Its closeness to Tianjin Port allows it to have access to over 400 ports in 180 countries worldwide. Also, to the west is the Tianjin Binhai International airport, which is a major airport for the transportation of cargo and passengers.

Some of the major companies that have invested in this area include Samsung, Honeywell, Toyota, GlaxoSmithKline, Coca- Cola, KYOCERA Solar energy, and TOHO Lead Recycling. It was interesting that when Toyota set up manufacturing in TEDA, its numerous suppliers followed it to the area.

To promote TEDA the organization has set up offices in 9 locations around the world. In order to attract investors, TEDA provides “one stop “service for investment policy consulting and procedure consulting to projects approval. I was not expecting the transparency and fairness in legal system, which TEDA promotes.

To support the investing companies and to attract prospective employees, TEDA has constructed schools, university, childcare centers. Tianjin has 55 higher education institutes, from where 60,000 students graduate every year. TEDA has partnered with various colleges and technical vocation schools across China to build adequate Human Resource pool.

What struck me was the amount of effort Chinese government was putting in to attract foreign investment. Tianjin looked like a busy city with heavy traffic. Apparently the infrastructure is not able to keep up with the development.

Another thing, which was striking, was the smog and the high level of pollution in air and water. TEDA officials commented that their goal in near future was to reduce carbon emissions. To this end they are working with different international companies to promote environmental sustainability. They are making efforts to create a sustainable environment, but the effects are not yet apparent.

Overall, I felt that China has made deliberate efforts to promote economic growth through financial and economic support and the lessons learned in areas like TEDA are being applied to develop new areas.

GE – Singapore Water – Technology Centre at NUS

One of the companies we visited in Singapore is GE – Singapore Water. The National University of Singapore (NUS) and GE launched the new Singapore Water Technology Centre back in June 22, 2009. This is GE Water’s first collaboration with a university in Asia-Pacific located on NUS Kent Ridge Campus with S$150 million (US $100 million) investment. The vision is to develop and test technologies in areas such as desalination, water reuse and generation of ultra-pure water for the semiconductor industry.

We wanted to capture a couple of things with the picture below. First, we had our picture taken with the GE logo outside the building as they don’t permit any cameras inside. The employees are very adamant about not letting anything leak out of this research center. In other words, this is a very secure environment to work in. It’s also a very hot and humid environment to work in! Singapore is located just one degree north of the equator. So the climate is very tropical. We were all soaked in sweat once we stepped out of air conditioned space.

The company culture

Our speakerwas Dr. Adil M. Dhalla, who is the director for the Singapore Water Technology Center. Dr. Dhalla has a master’s degree in chemistry from Indian Institute of Technology in Bombay. He earned a doctorate in chemistry from Cornell University in Ithaca, N.Y. Dhalla has co-authored 16 issued U.S.

We identified three major themes to take away from our speaker: innovation, global career growth, and global footprint.

Innovation – GE continues to innovate on products and services that solve big problems around the world. GE understands the global needs, both private and commercial for clean, potable water and is hard at work to develop ground-breaking solutions to meet those needs.

Global Career Development – We were excited to learn about GE’s heavy investment and focus on employee career development. This aligns with the GE case study we covered in the leadership class. Opportunities abound for GE’s employees that show promise and drive.

Global Footprint – It was amazing to learn about GE Singapore Water’s vision to produce clean and reusable water not just within Singapore, but wherever it is needed at a global scale. GE has offices, technology research centers, and plants on every continent. Adil showed us a current map of GE offices, and they covered the globe. They coordinate their efforts with video, phone, email, messenger – virtually any medium you can think of to stay in close communication. This allows them to pursue projects virtually anywhere in the world.

We were very impress with GE’s culture to innovate, ability to grow employees at a global scale and change the world with its product and services, and we thank Adil for his hospitality during our visit

What your business needs to know about Media in China?

Guest post by Krishnan Ananthanarayanan, Class of 2012

Media as a whole is undergoing a large transformation due to social media. The number of print media is between 7000and 10,000 (depending on whom you ask) and will be squeezed into a niche corner of the market.  Television in China is a $2.25B industry and the government regulates the content. For instance, there are bans on reality shows, shows that pertain to time travel and crime related programs.

Websites in China on the other hand allow many of these banned contents primarily because a forward-looking board of the government regulates them. There are websites such as the micro-blogging website Sina Weibo, which are very popular amongst the Chinese, and these websites can be used for effective marketing. The Chinese investigative media is also very strong. It is okay to criticize policy but it is NOT okay to criticize the top leaders of the party. The Chinese government does a good job at keeping international crimes alive in the minds of the Chinese and uses this as propaganda and as an effective control mechanism. Cultural awareness is key to running a successful business in China. Due to the history of attacks, Chinese sentiment can easily turn against foreigners in China. It is also critical to be sensitive of cultural issues not just within China but also across the world. For instance, Japan an advertisement showing the imperial lions bowing to a Toyota. This advertisement was never screened in China, but Toyota got a lot of heat after Chines bloggers found this advertisement on international websites. The history of wars with Japan only added to the heat.

It is also critical to realize the role of media in the Chinese government. In the United States and in other democratic countries, the media represents an independent voice and its role is to question government policy. China however follows the Leninist movement in which the Party is all-powerful and the role of the media is to serve the government and not to question it. It is critical for a foreign national to realize this key difference. Once this difference is understood, it is easier to understand all the other aspects such as censorship, control over the programs, bureaucracies for obtaining a license to host a website etc.

China places a great deal of importance on the consumer more than that of other western nations. On “National Consumer Day”, reporters run investigative reports on companies on Television and it is up to the company to defend its position on the issue under discussion. Top companies such as McDonalds have come under fire for selling inferior quality goods in China. The Chinese consumers take quality very seriously. If a company is suspected of selling inferior goods in China to make up for profits, the company is very likely to be ostracized and will find it hard to gain a strong foothold. Companies should go beyond seeing China as a low cost manufacturing center and start seeing it as a global market with a large population that has a big appetite for high quality products from across the world.

Global Expansion: Godiva and Amazon

Guest post by Dina Vaccari and Kevin Croy, Class of 2012

TMMBA students Kevin & Dina with Godiva presenter
Kevin & Dina with Meagan Dietz of Godiva

It was amazing how relevant our TMMBA courses were during our visits to Singapore and Beijing, both during cultural tours and company visits.  The Global Strategy course taught by Kevin Steensma was particularly relevant, especially during our visit to China.  Many of the companies we met with spoke to the entry strategy options along with key points to consider when entering a new global marketplace; class discussions had previously exposed us to many of these factors.   A trip to an Amazon fulfillment center located in China gave us unique insight into the company’s  operations in addition to their global  expansion strategy.

The representative from Godiva Chocolates discussed their decision making process and considerations regarding joint venture, direct investment, or partnership entrance strategy.  Godiva benchmarked their entry against other luxury brand entries, such as Coach and Haagen Dazs, companies that had already entered the China market successfully.  They studied these brands’ entry experience and weighed the pros and cons of each to determine which strategy would be the best for them.  In the end, they determined that the challenges they anticipated with their supply chain, particularly associated with the proper refrigeration of their products during transport, would merit a direct investment and owning their supply chain throughout the whole process to ensure quality and reduce shrinkage.

In addition to Godiva, we also visited Amazon, which brought our Macroeconomics and Operations Management classes to mind.  The population of China is urbanizing and becoming a more consumer-oriented culture, so companies are adapting to leverage this growing segment of potential customers.  Our visit to an Amazon fulfillment center (FC) in China helped illustrate this point because the massive FC we visited primarily handled orders destined for Chinese consumers.  Clearly, Amazon understands the potential of the Chinese market and has positioned themselves to capitalize on this trend.  Operations at the FC were very efficient.  Our tour began at the loading dock on one side of the warehouse where inventory entered the system.  Items were catalogued and routed to holding locations.  As orders were placed, pickers pulled inventory to assemble the appropriate products and prepare them for packaging.  Once packaged, the orders proceeded to an area with workers who labeled them for shipping.  Finally, orders were routed to holding areas until outbound shippers could collect them.  The streamlined process was well choreographed and reminded us of the risk-pooling and queuing concepts we learned about in Operations Class.

Every company we visited or street vendor we encountered  gave us  a new opportunity to  look at things through our new TMMBA lenses.  It was an amazing trip!

Student puts MBA to work on flight to Chile

Sara Jones, Assistant Director

johnandrichard TMMBA students arrived in Santiago last weekend for the International Study Tour.  One student is sharing stories from the trip on his blog.  What did he do during the first 3 days?  Talked marketing and value propositions on board flight 1, chatted with an IMF economist on flight 2, and dined out during a city-wide power outage.

Learn more about the Study Tour experience and view photos from the current trip.