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Common Sense Business Solutions

What I learned in China: Part 2

As per my previous article on my visit to China, we have much to learn about and from their people. It is potentially the largest market on earth with 1.3 billion people in one country but much will depend upon the growth of a large and wealthy middle class. Wealth is not evenly distributed in China. Its economy is still only 20% the size of the United States. Our newspapers report a slowdown in China’s economy but it is just decelerating and not growing as fast. Wages and prices are rising fast in China and the smart ones are looking for better business models. The people I met are concerned about the slowdown and perhaps an opportunity for Canada has presented itself.

But first, we as Canadians must know how we can fit in. I discovered that they have an interesting viewpoint on Canada. The Chinese people I met know little about our huge country. Many were astonished when I told them our entire population was smaller than some of their cities. I took a map of BC with me and they all pored over it, expressing surprise that the population was so small, so thinly distributed and empty in the North Country.

And they like Canadians. They think Canada is boring, lazy but safe; a stable supplier and a people to be trusted. Above all, we are not Americans.

Much of what we have, the Chinese would like to have for themselves. Food safety is an issue in China. Our food quality is highly is regarded. One visitor to Kelowna told me that there is bakery in Hong Kong that proudly announces that all their goods are baked with Canadian flour.

But what the Chinese people do not understand yet is that we can be a conduit to the US and Europe for their goods. The two largest markets today are Europe and the US. Canada has good trading relations and a free trade arrangement with both. We understand the business climate in both our trading partners. We speak the language and share a culture. The Chinese do not.

Can we use this knowledge to build businesses in Canada? We can become the conduit to both markets, working our magic as a multicultural country, encouraging immigrants and wanting to rely less upon America. We have systems in place that work and guarantee the quality of the end product whether it is animals or crops, intellectual property or machined goods. Our federal government is working to improve our trade relations and Mr. Harper’s last trip was to establish a framework for Canada to become one of the few places on the planet (London and Singapore are among them) where Chinese yuan can be converted without using US dollars as the standard.

We are at the starting square in a game of snakes and ladders. Put on your thinking caps and start learning about China. The path can be a slippery slope or just a missed opportunity. The better way is up. The next few years are going to be truly interesting for those who embrace the opportunity.

 

This column focuses on business problems and how to solve them. Andrew Gregson, BA, MA , M.Sc.Econ is an economist, author and a Senior Partner in iNTENT Financial Inc, a Kelowna based finance and consulting company. The 4 partners specialize in finance, pre-determined profitability, sales and marketing. If you need further information, please contact us through the website at www.intentfinancial.com



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How to transform a tired idea

Purdy's Chocolatier turned a 107-year-old recipe into one of its top sellers today with a few simple, but brilliant, major hit.

They say there are no new ideas under the sun.

That may be so, but old ideas tend to do better with a little bit of a makeover for modern sensibilities. Kriston Dean, vice-president of merchandising and marketing at Purdy’s Chocolatier, knows this to be true. The company’s Himalayan Pink Salt Caramels, introduced in 2009, have become a marquee product; more than 10,000 boxes of the salty-sweet chews are sold each year. Here, Dean explains how the firm turned a 107-year-old recipe into a major hit.


 

The origins

“Our head chocolatier, Gary Mitchell, noticed a trend in the sweet and savoury category, and so he took a vanilla caramel recipe from 1907 and started to play with different salts and textures. He tried grey smoked salt and Cabernet salt, but landed on pink Himalayan salt, partly because of its story: It’s from the oldest salt mine in the world, it has 84 trace minerals, and it’s pink!”

Early trials

“He applied the salt in different ways: baked in, infused, topped. Then he presented the caramels to our product development committee, which includes me and our chocolate scientist and president, Peter Higgins. If it passes the taste panel, we do a full batch in our test kitchen.”

Moment of truth

“We put it into local shops to get customer feedback. We normally do a full costing and market evaluation to see whether the customer is willing to pay a price that will give us an acceptable margin, but ultimately, it’s the customer who decides.”

We have a winner!

“Gary comes up with more than 150 recipes a year. Only about six of them get to market. The Himalayan Pink Salt Caramel was unusual in that we had a product right away. It was an instant hit. We were ready to launch it in the fall of 2009.”

Roll it out

“Manufacturing in Vancouver is key to what we do. Because we use no preservatives, our product has a short shelf life. We can make everything here and have it shipped it to our 70 stores across the country the same week. If we manufactured anywhere else, we’d have to change the model completely.”

This story is part of the package in the October 2014 issue of Canadian Business.

 

This column focuses on business problems and how to solve them. Andrew Gregson, BA, MA , M.Sc.Econ is an economist, author and a Senior Partner in iNTENT Financial Inc, a Kelowna based finance and consulting company. The 4 partners specialise in finance, pre-determined profitability, sales and marketing. If you need further information, please contact us through the website at www.intentfinancial.com.



What I learned in China

I will never be an expert on China. It is just too big, too complex and too old with layers of history and meaning that would take several lifetimes to unravel. As I said to my hosts, China, driven by it huge population builds big - big airports, big train terminals, big road systems, big apartment blocks - and yet you drink tea from cups the size of thimbles.

Because of the gigantic size of their market, many companies can specialize. I drove down 15 miles of road entirely devoted to furniture stores. We crossed over to the shoe district and then to the leather district. We visited a factory producing water based ink on his 10 acre site and a factory devoted only to embossing paper. On my last day, I found myself in a square mile of narrow alleyways devoted to wedding dresses and tuxedos in a quest for that right little number for my wife. In driving around, however, I was most shocked by the sight of a small shop of perhaps 500 sq.ft. that sold only electric drills. In our micro market, where everyone has to be everything, all the time, it was refreshing to see a different and profitable business approach.

It reminded me of research on the US I did years ago where I found an obscure town in Nevada, I think, that produced most of the rubber pipe used in the US. The United States has a gigantic market and efficient distribution system (read road, rail and air) whereby it is possible to dominate a market and yet not be at the centre of it. Think of what we could do better with NAFTA which is in explicably under exploited by us.

How could we emulate the success of China? We have cheap power, high labour costs and some cheap raw materials. We are shipping raw goods to China. The successful Chinese manufacturers in turn buy German and Japanese equipment to operate lights out facilities and then ship back to us. Is there a model there? Do we need more entrepreneurs and highly skilled labour?

But China has entered a sluggish period and that is forcing a change that will have long term benefits. The old style entrepreneurs sold on price alone. Many have not found a way to break that mold. But a few have gone to the quality end of the spectrum. This is especially valuable in meeting the demands from BC over the next 10 years for the rapid development of the energy and minerals sector. I visited two vocational schools there that churn out 3000 CNC machine operators a year; that train 300 baristas a year – for the skyrocketing coffee culture in China. And the emphasis was on a quality product, customer service and cleanliness that would put to shame huge swathes of business in British Columbia.

China has lessons and opportunities for us. We need just to listen and pay attention – then act.

 

This column focuses on business problems and how to solve them. Andrew Gregson, BA, MA , M.Sc.Econ is an economist, author and a Senior Partner in iNTENT Financial Inc, a Kelowna based finance and consulting company. The 4 partners specialize in finance, pre-determined profitability, sales and marketing. If you need further information, please contact us through the website at www.intentfinancial.com.



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Experts share strategies in Kelowna

The third week in October is “Small Business Week”, a week dedicated to supporting local, small businesses. The week was designed to bring awareness to Canadians about the role small business plays in our economy. A group of six business experts has put together a full day of educational, hands-on sessions designed to help business owners grow their business.

Small Business Sales Summit [ http://salessummit.ca ]

“Most small business owners today aren’t focused on growth. They’re more concerned with just surviving,” said Colin Parker, CSO of Lonestar Sales Performance. “Daily I have local small business owners tell me how it’s a struggle competing against big box stores and online competition. It is a constant battle to find time, sell more services and help clients.”

At 5.3 percent, the Thompson-Okanagan region recorded the fastest net growth in the number of small businesses between 2007 and 2012. That increase in numbers brought new jobs, innovation and vibrancy to each community. Despite their importance, many small businesses struggle to achieve success amid a crowded market of big box stores and online mega-retailers.

On Tuesday, October 21st, 2014 at the Mary Irwin Theater in Kelowna, six of the best local sales and business growth specialists will provide a day of education and learning targeted at helping the small business owner grow. The Small Business Sales Summit is an intensive, hands-on, “here’s how you do it” workshop.

“We’re here to show small businesses how to not only survive but grow and thrive,” said Colin Parker.

This full day event is co-sponsored by three companies who are dedicated to helping small business grow; CIBC, Younility and Regus Office Solutions. The six local speakers are: Crystal Flaman, Dan Zaleski, Frithjof Petscheleit, Alexandra Krieger, Guy Steeves and Colin Parker. Tickets are $74 per person and are available at the Rotary Centre for The Arts Box Office or online at Select Your Tickets.

I would highly recommend that small business owners make time for this workshop. The learning opportunity gained during this day could be the “make it” for your business this quarter, in 2015 and beyond.

 

This column focuses on business problems and how to solve them. Andrew Gregson, BA, MA , M.Sc.Econ is an economist, author and a Senior Partner in iNTENT Financial Inc, a Kelowna based finance and consulting company. The 4 partners specialize in finance, pre-determined profitability, sales and marketing. If you need further information, please contact us through the website at www.intentfinancial.com.



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About the Author

Andrew Gregson, BA, MA, M.Sc. (Econ), holds a Master's Degree in Economics from the London School of Economics.

Andrew's experience working with an international business consultancy and being a business owner for 15 years was the impetus for his book "Pricing Strategies for Small Businesses". He brings his expertise in finance, pricing and debt restructuring to the table to help struggling manufacturing and service companies to return to profitability. This has helped companies to rebuild value and often to sell at much higher dollar values.

Andrew has contributed to trade journals, "Spark" on CBC National Radio and has been a guest speaker at business networking groups, colleges, universities on his topics of expertise - pricing, exit plans and debt. He is also a frequent contributor to blogs and online postings for business help.

Andrew is currently the President, Board Of Directors intent Financial Inc., his role is overseeing intent Financial Inc., Intent Investment Corporation and other related ventures.

 

Website link:  www.intentfinancial.com

Contact e-mail address:   [email protected]









The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet presents its columns "as is" and does not warrant the contents.


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