Nano-technology creators find strategic partners in China's construction industry
A leading nano-coating research institute in Sweden planned to commercialize a cutting edge technology with China as one of its primary target markets.
The main application of the technology was within the building and construction industry.
We worked closely with the client to define target segments and criteria for potential alliances.
We further supported the client in the final negotiation phase to bridge differences, creating a fully integrated entity that is delivering results: a smooth go-to-market with promised profits.
China’s fast-growing building and construction industry makes it one of the largest markets in the world. Due to the Chinese government’s stricter environmental requirements on material production, there has been a strong demand for environmentally friendly advanced coatings from the industry.
However, for advanced technology to enter the China market, the process has never been easy. IP risks and culture gaps with locals are the two main barriers for any foreign company trying to establish a partnership with a Chinese company.
ARC Consulting has significant experience helping foreign companies connect with local companies through its global presence and local knowledge.
The project was executed as follows:
1. Market Research and Industry Mapping
After conducted a thorough analysis, the conclusion was made that Shandong and Henan are the two provinces where most of the potential partners are located. A list of company names was compiled, and ARC Consulting called these companies to evaluate their initial interest on the idea of a partnership. The companies were then presented to the client with their key information highlighted.
2. Potential Partner Visit
Potential partners were visited together with the client. ARC Consulting provided translation to smooth communications and to increase the probability of an agreement. After the visits, all the potential partners were evaluated using a score card, based on the criteria previously aligned with the client.
3. Term Negotiation
ARC Consulting then assisted the client on term negotiation and again, increased the probability of a deal.
ARC Consulting provided its independent opinions to advise the client throughout the partnership search process.
Interest levels of the potential partner, likelihood of the deal, and potential risks were clearly communicated to the client.
ARC Consulting helped the client to screen the building and construction supply market in China, with the main relevant players outlined, evaluated, and visited.
With the help from ARC Consulting, the client was able to communicate directly with the potential partners, to understand their market position, technical needs, and the product-to-market fit in China, and to compare against offers from customers in other markets.
Within the first year after the project, a strategic alliance was fully formed and integrated. The realized net synergies in the first year were estimated at €3.5M.