Team Flowers: A Flower Market Tour of China

Written by Leah Finn, Mary Harty, Anne Kramer, Laura Smith, and George Panagiotakapoulos

A hydrangea greenhouse at Kunming Hasfarms

A hydrangea greenhouse at Kunming Hasfarms

Agripacific Holdings is a holding company that owns a number of cut flower farms and distribution centers across Asia, including its two main growing sites, Kunming Hasfarm in Yunnan, China, and Dalat Hasfarm in Dalat, Vietnam. For our IBD project, our team (a.k.a, Team Flowers) partnered with Kunming Hasfarm (KMH) to develop a marketing strategy for selling cut flower crops throughout China – at the moment, most of KMH’s flowers are exported to Japan, while the domestic market is primarily served through a small scale of imports from Dalat Hasfarms. As Chinese incomes rise, a growing middle class is spending more money on luxury home products like flowers, creating a promising market. KMH tasked our team with helping them strategically scale their domestic sales of cut flowers by considering the optimal target customers and sales channels.

For our in-country visit, KMH planned an itinerary that would give us a thorough look at the flower industry in China by visiting six cities – Kunming, Beijing, Shanghai, Hungzhou, Guangzhou, and Hong Kong – to tour flower markets, interview wholesaler customers, and even visit the farms of several of their competitors. Luckily for us, this meant we got to experience a diverse range of Chinese cultures, food, and sights as we learned about some of the nuances of each local market.

We began the trip in Kunming, a small (by China standards) city of 6 million in the western Yunnan province. We spent two days touring KMH’s greenhouses and learning about the processes of growing carnations, green wicky (a fuzzy green flower described to us as “soft, like a panda’s face), and hydrangeas. We also visited the Dounnan Flower Market, one of the largest flower wholesaler markets in China. The coolest part about this was the flower auction: an enormous warehouse full of lower-quality flowers (mostly roses) and a huge room to the side where wholesalers gathered to bid on them, Dutch auction style while smoking heavily and doing business on cell phones. It was quite a sight!

Flower auction in Kunming

In Beijing, Shanghai, Hungzhou, and Guangzhou, we visited KMH’s largest wholesaler customers and the Shanghai-based distribution center for the import business. Through our many interviews, we learned that KMH has a strong reputation as a high-quality grower; most of their wholesaler customers would buy more flowers from them if not restricted by supply. Since the China-based farm already had plans to expand growing, we saw an opportunity to organize their Shanghai- and Beijing-based sales teams to begin selling domestic product in those regions, rather than solely managing the import business.

Another powerful opportunity we recognized for KMH is the meteoric rise of e-commerce that has taken place in the past few years, impacting all industries. In many ways, China has surpassed the US in its use of technology in commerce: for example, rather than credit cards, nearly everyone pays for things by scanning a QR code on the item with an app on their phone called WeChat. In the flower industry, many startups have innovated by offering weekly flower delivery services through a subscription model, and several wholesalers have shifted all of their operations online. We had the chance to interview several contacts from these companies to learn about their innovative models. A key question we investigated for KMH was how they could incorporate technology into their business model, and how far down the value chain they should reach to implement it – that is, whether to switch from B2B (selling to wholesalers) to B2C.

Team looking over Beijing with 2 of KMH’s staff acting as our tour guides

The trip concluded with a trip to Hong Kong, where we delivered our final presentation at Hasfarm’s office there. In addition to recommendations about reorganizing their sales force and adopting a technology platform to track customer data, we discussed the trend we observed of new flower companies, particularly in the eCommerce model, shortening the value chain (typically grower to wholesaler to retailer to customer) to increase margins and lower prices beyond the offerings of their more traditional competitors. We encouraged KMH to pay attention to competitors adopting this model as the market grows.

Overall, we were incredibly impressed by the hospitality provided to us by our clients and associates in the industry. After nearly every interview or market visit, we were taken to an elaborate meal, treated to a tea ceremony, or toured around sights like Tianenmen Square by members of the KMH staff or their wholesaler clients. We feel lucky that this experience introduced us to the warmth, beauty, and diversity of China.

Updates from IBD Shanghai – ARM Accelerator

Written by Harsh Thusu, Jennifer Hoss, Justin Wedell, Chris Roberts, and Amanda Eller

FTMBA students Harsh Thusu, Jennifer Hoss, Justin Wedell, Chris Roberts, and Amanda Eller traveled to Shanghai, China during summer 2017 to work with ARM Accelerator.

IBD team in the ARM Accelerator Shanghai office

The Internet of Things (IoT) involves embedding objects in our surroundings with sensors, which capture data and make decisions without the need for human intervention. IoT is poised to change the world, and our client, ARM, is playing a major role in the IoT revolution. ARM is a multinational semiconductor company that designs architecture for the chips that power our smartphones and tablets. Over the next 20 years, ARM expects to deliver 1 trillion chips for IoT devices.

Two years ago, ARM China launched the ARM Accelerator to support IoT startups. Our five-person IBD team traveled to Shanghai to work with ARM Accelerator, helping them develop a strategy to attract Silicon Valley startups, and crafting a plan to diversify their revenue sources.

Initial Research: Bringing Silicon Valley to China

IBD team members Jen, Harsh, and Chris presenting our recommendations to ARM leadership

Our initial challenge was to advise ARM Accelerator on a strategy for attracting U.S. startups. We hypothesized that U.S.-based startups would not want to travel to China for the program, and anticipated recommending a Silicon Valley office. To test our hypothesis, we spoke with founders from 12 different IoT startups in the U.C. Berkeley ecosystem.

We were surprised to learn that virtually all of the founders had either already spent time in China, or anticipated going in the near future. The primary reason for Chinese travel was to connect with manufacturers, but several startups were also interested in meeting Chinese investors and customers.

IBD students with ARM Accelerator leadership, including Allan Wu (center), President of ARM China and Haas MBA ‘96

We also discovered that most startups learn about accelerators through their networks. The ARM brand is strong, but few startups had heard of ARM’s accelerator, underscoring the need for business development efforts and localized marketing content in Silicon Valley.

Evaluating the Accelerator Business Model

In the weeks leading up to our trip, we expanded our focus. At two years old, ARM Accelerator is still a startup, and they wanted insights into how other accelerators achieve financial sustainability. We analyzed successful accelerators from around the world, and compiled preliminary recommendations to test in-country.

IBD team member Jen Hoss at the TechCode Shanghai Accelerator, testing an Augmented Reality windshield

 

Day of Arrival

On May 12, we flew to Shanghai. None of us had ever visited mainland China, and we were eager to meet the ARM Accelerator team and learn more about the Chinese startup ecosystem.

ARM Accelerator founder Andy Chen and head engineer Shi Lei gave us a warm welcome, and briefed us on an itinerary packed with interviews. Over the following days, we met with ARM Accelerator graduates, venture capital investors, other accelerators, and the local government. We even attended a presentation in which ARM Accelerator companies pitched their autonomous vehicle technologies to representatives from BMW.

IBD team members from left to right, Jen Hoss, Justin Wedell, Amanda Eller, Chris Roberts, and Harsh Thusu, meeting with bike-sharing startup MoBike.

Interview Highlights: TechCode, Shanghai government, and MoBike

TechCode is an accelerator and incubator started in China, with locations all over the world. Daphne Han provided insights into the benefits of the accelerator for TechCode’s corporate sponsor. She also gave us a tour of their co-working office space, and IBD team member Jen got to test a TechCode company’s “Smart Windshield,” which uses Augmented Reality to provide real-time information to drivers.

Another highlight was our meeting with Zhang Lan from the Shanghai government’s Development and Reform Committee. Mr. Lan shared fascinating insights about the government’s role in supporting entrepreneurship, and the incentives available to ARM Accelerator companies.

Mr. Lan then brought us to the MoBike headquarters. MoBike is a bike sharing startup that has taken

IBD team at the MoBike Shanghai office, with Shanghai government official Mr. Zhang Lan and our ARM colleague Allan Zhong

China by storm, with support from the government. 25 years ago, Shanghai was full of bicycles, but their replacement with motorcycles and cars has exacerbated pollution. MoBike is reversing the trend, and we were impressed by the number of Chinese taking advantage of MoBike. MoBikes can be parked anywhere, and locked or unlocked with a smartphone app; each morning the bikes pile up in front of office buildings, and by evening rows of MoBikes surround the metro stations.

Our ARM Accelerator hosts took us for a traditional Chinese business dinner, which meant plenty of baiju, or Chinese spirits

Eating our way across China

The team made the most of our free time by trying every dumpling we could find. We learned about the art of handpulled noodles, sampled Uigher-style barbecue, and tasted Schizuan Province’s spicy mala peppercorns.  We even contemplated opening a Berkeley franchise of China’s popular Yang’s Dumplings chain.

Between meals, we climbed the Great Wall, explored Beijing’s Forbidden City, and hiked the mountains surrounding Hangzhou’s famous West Lake.

And throughout our trip, we were greeted by local Haasies. Alan Wu, President of ARM China and Haas MBA ‘97 provided valuable feedback throughout our project and shared his visions for China’s technological future.

Making new friends over a Beijing-style hotpot dinner

And the Haas Shanghai Alumni group welcomed us with a happy hour, where we met two incoming classmates to the class of 2019.

After a successful three weeks in China, we are excited to continue following ARM Accelerator’s progress as they help build companies shaping the future of IoT.

All Around the World; IBD Teams In-Country

Written by:  Danner Doud-Martin, Assistant Director, Operations for the IBD Program

When I introduced myself to the Full-Time MBAs on their first day of class for the Spring IBD program, I told them I wanted to either be the sixth member of their team or be stowed in their suitcases.  There wasn’t a team I didn’t want to join as all 16 were going to work with great clients, on impactful projects, and in amazing destinations.  Now that our IBD students are scattered all over the world and sending photos and updates from their first weeks in-country, I am of course envious, but also proud to be a part of a program like IBD.  I am living vicariously through our Haas students as they have experiences that perhaps will change their lives, or at least make these next three weeks incredibly exciting.   

Team YGA having breakfast on Bosphorus river

Team YGA having breakfast on Bosphorus river

Teams tell us that they have been welcomed by their clients and the other members of the organizations with warmth, appreciation, and support.  They have enjoyed delicious local cuisine, been invited to people’s homes and seen the local sites.  They have toured crane factories, hospitals, warehouses, and flower markets.  Teams have scrubbed up and witnessed eye surgeries in Peru, been included in their client’s internal pitch meetings in Shanghai, and invited to lunch by the Prime Minister of Uganda.  They have been featured on local Turkish television and have conducted 3-hour design workshops for university students in Uganda.   

Team Seva before going into to witness a surgery in Peru

Team Seva before going into to witness a surgery in Peru

Importantly, they have learned more about their client’s needs: “One interesting thing that we have realised in our first 2 days is how much more we know of the business and the internal politics behind our client by just being here; which is something not very clear when you are sitting that far away,” shared one Team Lead.  There is an opportunity now to “fill in our gaps in knowledge through the interviews, market visits, and retail store visits we have scheduled over the next several weeks. We look forward to the rest of the trip!” shared the Agripacific Team.  IBD Teams also feel more connection to the client’s objective and how important the project outcome is to their client.   “It is most exciting to be on the ground here and feel the immensity and importance of the work that our client does,”  shared Blakey Larson, IBD Team Lead for Civil Right Defenders.  IBD teams also see where and how they can add value.  Team Lead, Harsh Thusu said of his project, “we are most excited about helping the accelerator in this interesting journey as they are at a crucial stage of their operations and our recommendations could bring great value to them to tap into the US market with a sustainable business model.”

Team ElectroMech Team ElectroMech with crane

Team ElectroMech

On their first day in-country, IBD Teams gave a day-of-arrival presentation, updating their clients on their findings to date and outlining their 3-week work plan leading up to their final presentations.  Teams felt good about their presentations and expressed how “engaged their clients were.”  They appreciated the collaboration, feedback, and lively discussions.  Carolyn Chuong, Team Lead for Team Makerere said that their clients were “very enthusiastic and also helped us refine our Theory of Change for the Center and think through private sector needs.”

Client’s have already shared accolades about their Haas IBD team members.  Khamisi Masanje, from Makerere University, said:

“This team is exceptional. They are very innovative, articulate, friendly and professional. The team has the right blend of skills because everyone is so good at what he or she does while at the same time, everyone is working as a team. The testimony from our Makerere students, who attended today’s design workshop led by the IBD Team, were so amusing.  I like the natural blend they are having with our students, staff and the general population of Makerere.  We shall surely miss our Haas students when they leave”.

YGA’s Sezin AYDIN said of Team Lead Chelsea Harris’s performance at their press conference, “Chelsea has done a great job, you

Team Ananda

can see how clearly she conveyed her messages, in a calm yet positively energizing way.  We are very happy that we had a chance to offer this kind of experience to our team and very glad that we represented YGA & Berkeley and the mission we serve together in science center project the most beautiful way possible”.

My favorite compliment was from Makerere’s Charles Baguma who said, “I think we got a high-flying team from Berkeley”.  In my opinion, Mr. Baguma’s comment resonates with me because Team Makerere and all of the other 15 Full-Time IBD teams are exceptional.  Based on their photos and comments, all the teams feel they are flying high right now.  Is it because of the incredible opportunity to work internationally on a consulting project? Is it because of the impact that our students are making on the company and the region or the bonds that are being formed between team members as they share this incredible journey? Is it the beautiful places they are visiting and the culture that they are experiencing? It is all of the above and more!  

You can enjoy their adventures by friending us on Facebook at bit.ly/facebookibd.  Each week we will post a blog written by each IBD team highlighting their experiences, and our first one written by Team Makerere can be found here.   You can also subscribe to our blog by going to bit.ly/ibdblog.

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IBD Teams United – The 2017 Full Time MBA IBD Program “Big Reveal”

017 Full Time MBA IBD Program “Big Reveal” Day

Finally, the wait is over!

The Spring 2017 IBD program Team Leads, faculty, and staff don’t have to stay quiet any longer.  The IBD “Big Reveal” event took place on March 2nd when each Team Lead welcomed their respective Team Members with a short two-minute video on their client, their industry, and their overview on what the team has been tasked to solve.  Team Leads also included information about their project destination and what they might experience while living and working for three weeks in-country.  Finally, Team Leads presented their four new Team Members with a small gift that represented something about their project country or client.

Said one Team Member of the experience, “The IBD reveal day was a lot of fun. (Team) Leads did a great job staying silent until the day of so it remained a mystery, which I loved. The videos were hilarious and all of the gifts were so thoughtful.”

Team Tekes has hugs all around

Clapping, hugs and handshakes were exchanged after each IBD team was revealed.  

Another incoming IBD Team Member commented that “I loved seeing all of the fun videos and learning about all of the projects!  The local country specific gifts for team members made the reveal especially tailored and fun.  I was so excited to find out that I’d be spending my summer in Thailand, with a great group of people, working in a new industry.  It is sure to be a fun experience and I look forward to being challenged personally and professionally along the way.”

Team ARM meeting for the first time

Once the IBD project “Big Reveal” was concluded, it was time to get the newly formed groups working on a team building exercise called the Viking Attack – a longstanding IBD tradition.   Building successful team dynamics is one of the main goals of the IBD course; IBD Executive Director Kristi Raube often describes IBD as “teamwork on steroids.”  Although there are many courses at Berkeley-Haas in which MBA students work in teams, there isn’t one quite like IBD in which students end up spending three weeks together outside the US working on a consulting engagement.  As Kristi Raube put it, “we really emphasize teamwork, as students will need to rely on each other in-country.  International work is all about being flexible and being able to handle unpredictable and difficult situations.”  

YGA Team Lead giving her new Team Members yummy baklava

Over the next seven weeks leading up to the departure to their respective project countries, IBD teams will work to gather more insights from their clients, conduct extensive research, and tackle the problems they have been tasked to solve.  At the same time, Kristi Raube and the IBD Faculty Mentors will work with the students on IBD course goals like developing consulting skills and techniques, communication and storytelling skills, and understanding cultural dynamics.   As Faculty Mentor Judy Hopelain observed at this point in the course, “My teams are excited, revved up, and they know what they are doing.”  

Team G-Hub

Tune in next month when we check back with the IBD teams on their progress, and we learn how ready they are to head out on their international adventures.  

To see all the photos from the Spring 2017 IBD Program “Big Reveal”, click here.  https://drive.google.com/open?id=0ByYfWhxK5s7RUzJQX1BULU11VFk

Team ElectroMech

 

Updates from IBD China – Team CreditEase

Berkeley-Haas Evening & Weekend MBA students Jason Eaves, William Huang, Arthur Ng, and Harish Srinivasan participated in a summer IBD project in Beijing, China with CreditEase’s P2P Online Lending platform Yirendai.

First week in country

The team received a warm welcome from the clients during our first day visit at the Yirendai office. We presented the day of arrival presenation to the Yirendai CFO (Dennis Cong, Berkeley-Haas EWMBA Alumnus) and the senior management team. Our client had also arranged meetings for us with other CreditEase departments on Tuesday, which included Wealth Management, Personal Loans and Risk Management. To fully understand the internet finance industry in China, we performed personal interviews with our clients, industry experts and end-users. Our team members were able to obtain several good insights which helped us identify opportunites for Yirendai to further improve their marketing, operations, product development and business development functions.

First day of arrival lunch with clients at the Yirendai office (Chaoyang District, Beijing)

First day of arrival lunch with clients at the Yirendai office (Chaoyang District, Beijing)

LendIt Group Dinner with CEO of CreditEase Mr. Ning Tang (Restaurant 1949, Beijing)

LendIt Group Dinner with CEO of CreditEase Mr. Ning Tang (Restaurant 1949, Beijing)

Mobile Finance and Online P2P Lending in China

We were very fortunate to be physically in Beijing to attend the 2015 China Mobile Finance Conference/LendIt China with our clients during the first week of our in-country work. With a growing mobile user base, China has elevated the use of mobile services and online P2P platforms to include services such as mobile payments, Internet finance, transportation, home renovation, and lodging.

The LendIt conference featured several guest speakers and panelists including executives from leading Chinese mobile and P2P lending companies, representatives from P2P regulatory associations, and executives from U.S. P2P lending companies/ including Ron Suber from Prosper and Jeremy Todd from Orchard Capital. All speakers offered their key insights on the growing Chinese P2P market and the steps that need to be taken in order to continue the momentum. After the conference day, our client invited us to an intimate dinner with their leadership team and the US executives where we had the opportunity to network and learn more about global P2P trends directly from the top experts in the field.

2015 Mobile Finance International Summit/LendIt China (National Conventional Center, Beijing)

2015 Mobile Finance International Summit/LendIt China (National Conventional Center, Beijing)

Taste of China

With such a large population and so much cultural diversity, Beijing had not only the traditional northern cuisines, but also a good variety of regional foods from all over China.

Peking Duck- the signature dish of Beijing

Peking Duck- the signature dish of Beijing

We are very fortunate to have worked with Kelly Zheng (Corporate Strategist for CreditEase), who kindly took us to several specialty restaurants for dinner, even after a long day of work. The cultural experience of Chinese dining certainly surprised us and some of the foods were also quite challenging to eat.

Team dinners with our client (Kelly Zheng) at traditional Beijing style restaurants

Team dinners with our client (Kelly Zheng) at traditional Beijing style restaurants

Culture, History, and Art of China

As China has emerged to become a major economic power – with annual double digit growth rates – it is easy to overlook its heritage in light of the modernization happening throughout the country. While there are countless office buildings and skyscrapers under construction in the city center, China’s rich culture has remained at the foundation of its rapid forward progress. While in-country we took some time to visit historical sites and experience the performing arts.

Chinese “Face Change” performance originated from the Szechuan province

Chinese “Face Change” performance originated from the Szechuan province

The Great Wall of China, just outside of Beijing

The Great Wall of China, just outside of Beijing

Summer Palace of the Qing Dynasty Emperor located in Beijing

Summer Palace of the Qing Dynasty Emperor located in Beijing

Final Thoughts

Despite only two weeks of in-country work, our team was deeply immersed in the local business culture, food, and way of life. We observed that Chinese financial technology firms can have ambitious goals while having fun at the same time. During the process of coming up with recommendations, we leveraged the strengths of each team member and used the frameworks we learned at Haas. In our final presentation, we introduced our Berkeley-Haas innovation process to Yirendai’s executive management team and got positive feedback on our strategic recommendations related to brand awareness, net promoter score, partnerships, innovation process, and data strategy.

Berkeley-Haas IBD China Team presented CAL gear to the Yirendai management team

Berkeley-Haas IBD China Team presented CAL gear to the Yirendai management team

Updates from IBD China – Team Thermo Fisher

IBD Team Thermo Fisher (Ramya Babu, Lisa Becker, Scott Crider, George James) worked with the China division of Thermo Fisher, an American multinational company, on a growth strategy project for its environment / water analysis segment.

Moving Fast

Shanghai is not what we expected it to be. Even George, who had already lived in this city before was surprised by how modern and western Shanghai has become. We stayed in Pudong, aka “Pu-Jersey”, a 45-minute subway ride from the famous skyline of Shanghai. With nearly 25 million in habitants, Shanghai is currently the largest city by population in the world.

View of the Lujiazui skyline from The Bund, a large, public walkway in Puxi

View of the Lujiazui skyline from The Bund, a large, public walkway in Puxi

The most awe-inspiring thing to behold is the speed at which China is developing. Mega structures that did not exist a few years ago now tower over older buildings. The pace of growth and notion of limitless possibilities in China, and especially in Shanghai, is quite remarkable.

Food to Die For

Upon arrival, we acquainted ourselves with the area around the hotel, home to many expats. The local businesses cater to this population and thus there are many non-Chinese restaurants, with prices not much different from those of the Bay Area.

We sampled many traditional Chinese meals with our Thermo Fisher hosts, including lunches at the company’s business park cafeteria and dinners at Shanghainese restaurants.

The IBD Team with Thermo Fisher. From left to right: Zheng Xin (Thermo Fisher), George James, Ramya Babu, Scott Crider, Lisa Becker and Lily Lei (Thermo Fisher)

The IBD Team with Thermo Fisher. From left to right: Zheng Xin (Thermo Fisher), George James, Ramya Babu, Scott Crider, Lisa Becker and Lily Lei (Thermo Fisher)

One of our favorite meals was la mian, huge bowls of noodle soup for around 12 RMB (or $2 USD). Other favorites included xiao long bao (soup dumplings), Da Dong’s Peking Duck (Beijing’s most famous dish) and, of course, the local pijiu, Tsingtao.

La mian

La mian

Xiao long bao

Xiao long bao

The People

We encountered a variety of people in the new, cosmopolitan city of Shanghai: cab drivers from the provinces, coworkers from Beijing, and foreigners from every corner of the globe. As different as they are, these people all share something in common – the pursuit of opportunity. From the rich to the poor, Shanghai represents the growth of China and the opportunity that a booming economy can create.

The people we met were very open to meeting foreigners, especially those who are interested in Chinese culture. George fit in well with the locals and made friends with the Chinese who appreciated his interest in Chinese language, arts and history.

Taking a quick nap on the subway after a long and jolly conversation: George James (left) and Shangainese local (right)

Taking a quick nap on the subway after a long and jolly conversation: George James (left) and Shangainese local (right)

Culture and Business

Interacting with businesses in China was quite eye opening. There were several conflicting characteristics that we observed. The most prominent are embracing proven ideas, struggling to adopt new ideas, and moving fast. As we spoke with our client and their customers, one idea was repeated throughout: the use of best in class practices combed from all over the world are representative of “Capitalism with Chinese Characteristics”. The sheer thirst for knowledge that has been proven was astounding to observe.

In direct contrast to the assimilation of proven ideas is the struggle to adopt cutting edge ones. We used design-thinking processes that we had previously learned in the Problem Finding, Problem Solving class. Our client struggled to understand the value of diverging from common practices to flush out insights. This was especially interesting given that the client is a large multinational corporation based in the United States.

The IBD Team with Thermo Fisher grouping insights from customer interviews. From left to right: Lisa Becker, Lily Lei (Thermo Fisher), and Ramya Babu

The IBD Team with Thermo Fisher grouping insights from customer interviews. From left to right: Lisa Becker, Lily Lei (Thermo Fisher), and Ramya Babu

We are truly grateful for the hospitality shown by the city of Shanghai, a constantly evolving city that everyone should visit at least once in his or her lifetime.

Updates from IBD China – Team YY

IBD Team YY Spring 2015 (Ariana Alisjahbana, Claire Bianchi, Patrick Scandling) worked with YY Inc.–a Chinese social media company in Guangzhou, China.

There is a Chinese saying that goes, “People in Guangzhou eat everything with legs–except for the table.”

We were pretty excited about China’s “foodie city” when we heard we’d be going to Guangzhou. We did not go home disappointed.

The three of us spent three weeks there for our IBD project with YY Inc. YY is a live streaming social media company with applications in entertainment, online gaming, and education. China’s technology industry is growing at lightning speed and YY is one of the main players. YY is listed on NASDAQ with a $3.5 billion market capitalization and has approximately 400 million users.

YY China 1

A sampling of the food we ate in Guangzhou

YY China 2

The IBD Team with YY Inc. Left-right: Patrick Scandling, Simon Wang (YY), Claire Bianchi, Jonah Busch (guest), Ariana Alisjahbana, Alvin Sun (YY)

Our first day in the YY office, we experienced the classic cross-cultural miscommunication experience. We had been working with the YY team for a few months with a certain expectation of what the client wanted. When we met on the first day, it turned out the client expected something completely different! Rather than an international expansion strategy, the client wanted an overview of technology trends in Silicon Valley.

Luckily we were able to pivot quickly to follow the client’s request. We learned that meeting face-to-face–especially if there are language barriers–is key to this type of work.

YY China 3

Team YY hard at work in the office

The YY office gives a glimpse into life at a Chinese tech company

The internet technology industry is relatively new in China–YY is one of the companies that capitalized on the country’s growth. YY started as a live chat platform for online gamers. Now it has expanded to entertainment, online dating, and education. YY is perhaps best known for being the leader in monetizing virtual goods. The majority of YY’s revenue comes from selling virtual items such as roses, chocolates, gifts, and cars.

The YY office sits in contrast with the others in the Tianhe Creative Industry Park. You cannot miss it–there are two Teslas parked in front of the building every day and occasionally two Porsches.

YY China 4

Two Teslas parked in front of the YY office

Inside, YY has an open office floor plan. Perhaps the most unique aspect of their office culture is that everyone takes a 30 minute to an hour nap after lunchtime! One of us practiced this habit throughout our time at YY.

YY China 5

A typical day in YY’s office after lunchtime

Guangzhou is one of China’s five largest cities and the culinary capital of Southern China

Most Chinese technology companies are in Beijing, but YY is one of the few headquartered in Guangzhou. It is the largest city in Southern China with over 14 million people. For Americans, Guangzhou is most famous for being the place where railway workers came from back in the 19th century.

Unfortunately, we arrived in late May when temperatures hover around 28-35ºC (82-95ºF). Humidity levels were between 90-100%. Guangzhou has the famous Chinese big city smog since it is the capital of China’s manufacturing province. The city itself is impressively clean with efficient metro and bus rapid transit (BRT) systems. Taxis were also plentiful and cheap.

YY China 6

The Guangzhou skyline taken on a typical day

Traveling around China allowed us to see different sides of the country

We travelled to different parts of China on the weekends. Patrick and Claire went to Shanghai and Beijing with the IBD Shanghai team. Ariana went to Chengdu in Sichuan Province to see the pandas.

YY China 7

In Sichuan Province, Pandas can’t stand the heat and need air conditioning

YY China 8

Qingsheng Mountain in Sichuan Province filled with 2,000 year old temples

Every city was different from Guangzhou and had its own charm. Shanghai was perhaps the most westernized of the Chinese cities. Beijing was the leader in history and culture. Chengdu had the best nature and a laid-back lifestyle.

We enjoyed our IBD experience and look forward to seeing how the Chinese technology industry develops in the coming years.

YY China 9

Team YY and Team Thermofisher (Shanghai) on top of the Great Wall

Updates from EWMBA IBD – Team SVB in China

Angela Cheng, David Lu, Andy Tang and Orian Williams are Part-Time MBA students working on an International Business Development project in Shanghai, China with Silicon Valley Bank.

Enabling Entrepreneurship in China

Did you know that Silicon Valley Bank (SVB) helped Mark Zuckerberg with banking when he was just a little-known hoodie-wearing startup entrepreneur? SVB has been helping entrepreneurs succeed by providing unique financial products and services in the US. Our team is here to help them succeed in China.

Angela Cheng, David Lu, Andy Tang, and Orian Williams are EWMBA students working on an International Business Development (IBD) project in Shanghai, China. The scope of the project is to study credit quality in China for Silicon Valley Bank, specializing in banking with startups.

On our last day in the iLab at Berkeley before departing for the in-country engagement, we went through a brainstorming exercise with Frank Schultz, our IBD faculty mentor. We were glad that he was still smiling after all the hard work we put him through.


IBD-SVB Team + Frank

Week 1

The temperature in Shanghai was noticeably cooler than normal. This was a pleasant surprise and we took it as a good sign for our two weeks stay in Shanghai.

Our team of four arrived at Shanghai on three different flights. Contrary to the typical hours-long flight delays at the Shanghai Pudong Airport, our flights were all surprisingly on time. The first thing that struck us was the heavy pedestrian and vehicle traffic. Oftentimes, two moving parties were just centimeters apart while moving in different directions at high speeds. Just when it seemed like a collision was unavoidable, miraculously both parties maneuvered out of each other’s way. It was like two partners on a dance floor moving around swiftly without stepping on each other’s toes. This city seemed to thrive in harmony, without needing any verbal communication.

We met our sponsor, Arman Zand, from Silicon Valley Bank (SVB) for dinner the night before we officially began our work in the SVB office in Shanghai, China. In the Chinese culture, business and social gatherings are often conducted around good food. This occasion was no exception to that. Over several dishes of the local gourmet, we shared bits and pieces of our personal stories.

After dinner, our team kicked off our first official in-country working session in the hotel lobby to prepare for a meeting with the CEO the next day.

svb2First In-country Work Session

On our first in-country day at work, we put our knowledge of the Chinese culture and language to work immediately. We met our first interviewee, a startup incubator, at a building that provided office space and support to about 20 startups. Unlike the typical cubicle setup, each “office” was a 2’x4’ desk space which barely provided enough room for a computer, a cup, and a few miniature personal items.

svb3Startup Incubator in China

It almost caught us off-guard that our first meeting was conducted exclusively in Mandarin. It sure put some of our team members’ Mandarin to practice. A full hour of interviewing in Mandarin along with the writing of some names and terms in Chinese made our first in-country interview a very productive one.  As we found out later, the interviewers spoke more freely and provided more information if the meeting was conducted in Mandarin.

svb4Starbucks at Client’s Office

Did you know that a cup of Starbucks coffee is more expensive in Shanghai than in San Francisco? Our team discovered this because 3 of the 5 meetings on day one were at Starbucks. We were beginning to wonder if Starbucks was also where startups pitched to VCs, but that was not the focus of this project.

On day two of the in-country portion of our IBD engagement, our client helped arrange meetings with several well-known venture capital firms to better understand investor behavior in China. We tooled around the city in a gently used mini-van with our team of four plus our handler provided by the firm, and our driver. The weather was a lot warmer than in the Bay Area so thankfully we left our woolen clothing at home. We had one more meeting to go before having dinner with our sponsors’ team at a local Shanghainese restaurant.

Our itinerary had been non-stop since our arrival, but the team was eager to perform well.  The experience was amazing, but this first week had certainly tested our stamina.  This was one of the few IBD projects
with a public company this summer and so we all considered ourselves quite fortunate to have such a practical consulting experience.

svb5Local Breakfast

We decided to go native and got breakfast from a local vendor outside our hotel. Nothing too adventurous, just some steamed pork buns, although one of us did ask for a spicy one.   We also found a dry cleaning place that would wash dress shirts for one-tenth of the price that the hotel was charging. Did we mention that we love China?

We had a few more external meetings left over from earlier in the week and then some internal meetings to help us collect our thoughts. Performing internal and external interviews for the client gave our team twice the consulting experience.

svb6PFPS Exercise

To draw insights and align our observations from our interviews and observations from the last three days, we applied what we had learned from Problem Finding and Problem Solving (PFPS) class.

Our client invited us to their World Cup themed team-building event.  We were told that fun team building activities are not common in Chinese company offices and definitely were new concepts to SVB local employees. SVB tried to build a more collegiate and social culture in its office, and we saw that everyone was able to build off the energy and make the rest of the day more productive.

svb7World Cup Fun

At night, we met up with one of the EWMBA Seminars in International Business (SIB) classmates and we hung out at Nanjing Road.  Nanjing road was an interesting blend of old and new Shanghai.  Most of the original architecture and building fronts were kept but large billboards had been raised over them.  We also took the subway for the very first time.

svb8Nanjing Road

Over the weekend the team took the opportunity to recover from the late nights during the workweek. On Saturday we visited the Tianzi Fang district and the Yu Garden. The highlight of the day was our dinner at Lubolang, one of the best restaurants in Shanghai. We saw a photo of Hilary Clinton who had previously dined there. Their Xiao Long Bao (soup filled dumpling) was excellent.

svb9Best Dinner

On Sunday the team traveled to the outskirts of Shanghai for the local alumni chapter event held at the Sofitel Shanghai Sheshan Oriental.  We met Ann Hsu, the Shanghai alumni chapter coordinator, and her husband Tom, who used to work in M&A. Tom said he knew Professor Goodson – small world.

We enjoyed an all you can eat brunch buffet with mimosas. Some of the team members even took a dip in the pool afterwards. It was a nice opportunity to get some fresh air in the countryside, but we wanted to get back and work on some additional analysis for the project.

svb10Sofitel Alumni Event

Week 2

During Week 2, the Seminars in International Business (SIB) class visited the SVB office. The CEO gave a presentation about doing business in China and how SVB positioned itself as the model for innovation banking in China.  We even let them hang out in our cell.

svb11IBD Met SIB at SVB

Week 2 was an intense workweek as the team prepared the final report and presentation to the CEO. On Thursday and Friday, we made our final presentations to the CEO and SVB credit team.  We knew our work had paid off when the client told us that they finally have some tools to play with in China.  We celebrated our success at our client sponsor’s house over drinks and barbecue.  Thanks to Haas and Silicon Valley Bank, another great IBD project!

 

Updates from IBD China – Entering the Largest and Fastest Growing Market in the World

Spring 2014 IBD Student Joseph Kim shares his IBD team’s experiences in Shanghai China.

Our team is working in Shanghai, China for a large lab equipment distributor to improve the partnership and product selection process.  We had the chance to interview current customers from top research universities and leading multi-national companies while in Shanghai.  Although the project was challenging at first, as none of the team members had scientific backgrounds, the team pooled its collective experiences together and delivered clear process recommendations that will be implemented both internally and externally.

When we found out that we would be working for a lab equipment distributor, we looked at each other in bewilderment; first, we weren’t entirely sure what the company did, and secondly, we weren’t sure why they had selected a group of MBA’s all with finance backgrounds instead of a group of scientists in white lab coats.  Upon doing some company and industry research, we quickly learned that the company was a mature, industry leader in a growing Chinese market but that the U.S. parent company wanted to continue to grow its already large footprint.  It became clear that given our backgrounds we could help analyze the market opportunities and introduce processes that would increase success in product launches and finding new relationships.

 

tf1Rickety, pedal-powered wagons share the road with luxury vehicles on newly paved roads

Although the team was prepared to conduct a lot of analysis and have customer interaction once in Shanghai, we underestimated the large culture shock, especially for the members of the team who hadn’t worked overseas before.  Shanghai and its 24+ million citizens kept us on our toes and there wasn’t a dull moment that passed by.  Whether it was being hoodwinked in expensive cab rides or trying to find a restaurant that met all four team members’ dietary needs, we quickly realized that working in a developing country would be challenging even if our surroundings appeared to be developed.  Luckily for us, there were two other Haas IBD teams to share travel and experiences together.

tf2Even the chefs wanted to join the three Shanghai IBD teams at the world renowned restaurant, DTF – Din Tai Fung

Even with the language barrier, our best insights about the business came from interviewing customers.  We learned how culture can affect so many aspects of a business.  For example, one customer pointed out that Chinese workers prefer opening windows instead of turning on the A/C like her French counterparts.  Albeit a subtle difference, the smog and dust accumulation from opening a window affected lab results given the sensitivity of experiments, leading to opportunities for our client to introduce more durable machines.

tf3Overcoming language barriers and Questioning the Status Quo by feeling the sign loudly

Overall, IBD was a once in a lifetime opportunity.  We had the chance to put our MBA core learning to work from start to finish and had a blast while delivering recommendations that we know will make a difference.

tf4PFPS invades Shanghai

Updates from IBD China – Team YY

Spring 2014 IBD Team YY (Brandon Cato, Justin Harnoss, Peter Garai, Simon Yoo) worked with Chinese social media company YY in Guangzhou, China.

Our team spent three weeks in China working with social media company YY.com, identifying growth opportunities for the firm. We had a fantastic experience, coming away deeply impressed by the people we worked with, the Chinese internet industry and the country’s culture.

yy1The Team at the YY office (L-R: Peter Garai, Justin Harnoss, Simon Yoo, Brandon Cato)

YY is a Chinese internet company listed on NASDAQ with a market cap over $3.5 billion. They provide a live p2p streaming product and have been wildly successful in attracting amateur performers and their fans to their platform but also have services in a number of other verticals, including dating and education. While we already knew some of the impressive numbers associated with our client and the Chinese internet industry during the semester, our in-country experience really opened our eyes on how advanced their products and services are. We were blown away from the smart people we worked with, the state-of-the-art technology and the advanced monetization models we saw at YY.

One particular business practice we thought everyone should immediately adopt is quite simple though: after lunch, employees are permitted to take a nap until 2pm! Some of them have serious gear with them: foldable beds, eye covers, noise-cancelling headphones help turn the otherwise buzzing office into a silent snooze fest in the early afternoons.

yy2Nap time at YY!

yy3The team hard at work with the YY Bear

After three weeks of work, we capped off the project by presenting our recommendations to the management of YY. While we don’t know yet whether any of them will come to fruition, we definitely gained a lot by learning about how the hottest industry works in the largest economy of the world!

yy4Dinner after our final presentation

Guangzhou may not be on everyone’s radar as a top tourist destination, but the third largest city in China with a population of 11 million is growing at a blazing pace. The downtown area is already full with impressive skyscrapers, lit up in bright colors at night, and everywhere we went we could see at least 3-4 new ones being built. The growth was also represented by the Aston Martin, McLaren, Lamborghini dealerships located within a few blocks from our hotel, and their products on the road.

yy5We couldn’t find the color in the catalogue

The huge size and growth are accompanied with crazy traffic, as 5-6 lane roads slice through the city everywhere, and the local driving style left us with a couple of scares each time we were cabbing around the city. We quickly learned that pedestrians here are at the bottom of the food chain and one should carefully look in all directions even on a pedestrian crossing with a green light in a one way-street!

Weather-wise the time of our visit was less than ideal, the rainy season greeted us with showers, high humidity and temperatures around 90 degrees almost 24/7. Luckily, air conditioning was available everywhere, but the weather certainly did not encourage long walks outdoors.

yy6Dragon’s Boat Festival treats being prepared

yy7Guangzhou’s impressive skyline at night

The city has less expats than the others we’ve visited (Hong Kong and Shanghai) and thus is a bit tougher to get around for foreigners, but we didn’t have major problems. The language barrier was the greatest hurdle, but colleagues at our client and the hotel staff were always very helpful, and our sign language skills have definitely improved during the three weeks, while thankfully almost every restaurant had picture menus. Speaking of food: exploring the Cantonese cuisine was definitely one of the highlights of our trip. On occasions we had dinner with our clients who recommended us the best dishes, otherwise we just leaned on our awesome picture analysis skills to figure out what we are ordering (and what we definitely do not want to order).

During the weekends we visited Hong Kong – which is only a 2 hour train ride away – and Shanghai, were we met with Team Galderma. Both cities were phenomenal and we really enjoyed exploring the different faces of China. Unsurprisingly Hong Kong was the most “international” of the three, Shanghai showed its heritage as China’s most cosmopolitan city while Guangzhou made the impression of a city that at its current pace of development may very well present a picture much more similar to the other two in five years. We’ll have to check it out again!

yy8IBD Teams Galderma and YY join forces in Shanghai