GE Vice President and President of China, Luo Bangmin (Aladdin Lighting Network Profile)
An important means of doubling sales is to be more localized.
As an Olympic global partner, General Electric (GE) is clearly involved in the Beijing Olympics deeper than other companies. Like many American political and economic dignitaries, all members of the GE Board of Directors spent the third week of August in China. They first attended the opening ceremony of GE's new campus in Shanghai and then went to Beijing to see the Olympics.
Luo Bangmin, president of GE China, welcomed his board members with a smile of satisfaction, because the Beijing Olympics has become the most successful battle in the history of GE Olympics marketing. GE achieved more than $1.7 billion in marketing revenue through the Beijing 2008 Olympics. In addition to receiving contracts for 400 Olympic and related infrastructure projects worth $700 million in Beijing and around, GE's NBCUniversal broadcasted Beijing. The Olympics’ advertising revenue exceeded $1 billion.
China's opportunities for GE are not limited to the Beijing Olympics. Luo Bangmin and his team have more expectations. In an exclusive interview, Luo Bangmin revealed GE's next step in China.
Reporter: In 2008, the Olympic Games came to the East. It is well known that the Olympics came from Greece. This shows that the Chinese have a dream and hope that the world is flat. In addition to competitive sports, it should be gradually approached in other aspects. In the demonstration of the Olympic Park, we saw the direct drinking water project and the comprehensive utilization project of rain and flood provided by GE to make the bird's nest work normally. I would like to ask, will GE give this technology to the Chinese one day? Or if GE only regards China as a market or as a production base, it will transfer production lines and design lines to China like other Fortune 500 companies. ?
Luo Bangmin: It should be said that in the past we relied too much on importing some products produced in the US and Europe. Now we are realizing the shift of strategic focus. As our chairman Immelt said, we want to turn China into GE. The second home.
We are accelerating this process, and in the future, we will produce more products in China that are in line with the Chinese market. First of all, we must speed up the development of products in China that are in line with the Chinese market. We have 1,800 engineers in China who are doing this work.
Second, while we are producing more products that are in line with the Chinese market, we hope that these products can be used in other important markets in the world, especially in emerging markets such as India and Africa.
Third, we have also seen that many local companies in China are growing up. We are ready to establish joint ventures with these emerging companies, or to undertake other forms of cooperation, and we will also consider making some acquisitions in China.
Another part of our strategy is that we want to expand the coverage of our products. Now GE China has 12,700 employees nationwide, most of them in Beijing, Shanghai and some coastal cities. Next, we will establish seven key regional cities outside Beijing and Shanghai. We will use them as a base for strengthening cooperation with the government and partners, recruiting talents, and making full use of our technology and capabilities to further develop in this place.
The most recent example is that we are expanding cooperation in the Shenyang area of ​​Liaoning. We have a production base for wind energy generators in the production base there; we will further establish a production base for the transportation business and set up an engineering technology center to support Our energy and gas business. We have signed a memorandum of understanding on comprehensive cooperation with the Liaoning Provincial Government. The Shenyang model will be a sample of our development in second-tier cities in China.
In 2008, GE expects to achieve $5 billion in sales in Greater China. Our goal is to double this number in the next three years. An important means of achieving this goal is to be more local.
Reporter: GE has been in China for 100 years. Before we remembered GE, we always thought it was a big truck. But it has now become a television signal and has become a financial service. We want to know the current strategic focus of GM, that is, whether its financial services will have new practices in China. For example, how does it work with Chinese SMEs, does GE China have any plans for this?
Luo Bangmin: GE is actually the largest leasing company in the world. The objects of our financial leasing are not those super-large enterprises, which can be done by banks. Our goal is for the mid-market, some medium-sized companies. Our strategy in China is also aimed at those mid-level strategic markets that leverage our strengths in global financial services to expand our business in China.
Due to some restrictions in China's financial market, we have not yet fully launched our financial business here. The only exception may be our aircraft leasing business. Currently we are renting an aircraft worth about US$3 billion in China.
We also have a large consumer finance business around the world. It is our brand GEMoney. Now we are doing credit card business in China and working with Shenzhen Development Bank to issue cards. We are also trying to make loans for auto business. We are now doing this business in China through a financial company. In the long run, we also consider establishing a bank in China.
Reporter: GE started from some of Edison's technological innovations and eventually developed into a world-famous multinational company. Many of its pioneering management strategies have become examples for global companies to follow suit; now China's private enterprises are also in the small workshops from Edison. Transforming into a critical period for the development of large companies, as with Jack
Luo Bangmin: GE's diversified business model organized by the business unit can be successful because it can quickly allocate a company's capital to a higher-risk sunrise industry.
The meaning of diversification is not to say that the more business, the better, the key is that management must focus on high growth and high returns, while also analyzing where our competitive advantage is, we must have strong technical advantages, so that competitors do not It is easy to imitate, so as to ensure high growth for a period of time and high return on investment.
We try to absorb some high-tech business, which gives us a long-term competitive advantage. For example, the wind energy business of Enron, which we acquired five or six years ago, now gives us a good return on investment. GE Wind Energy brings $6 billion in annual sales. Another example is the water treatment business we acquired in previous years. Although the current return is smaller than wind energy, it has a good prospect because it can solve the global water shortage problem, which is a sooner or later.
As we choose new businesses, we must continue to divest assets. For example, the plastics business we sold in the previous two years is facing a two-way squeeze. On the one hand, the price of raw materials is rising. For example, oil prices have been going up, and on the other hand, there are more and more competitors. So we sold it to a Middle Eastern company that is oil-making and has advantages we don't have. This business is now developing very well.
The experience we have summarized is that, first, we must choose the business; second, we must make these businesses relevant to each other. For example, our financial management strengths run through all of our businesses.
When choosing a business, you can’t be too emotional, like Jack.
Reporter: How was GE's executives selected? How did you vote? Who voted? How was Mr. Immelt appointed?
Luo Bangmin: I have been working at GE for 24 years and I know this very well. GE has a very good track of talent development, talent assessment and talent development. We know how to put the right people in the right place and have a good talent pool. We have a very complete program called Session C. It is very famous in GE. There is an important content in the C stage. Each leader must tell the chairman during the annual work summary. If you leave this position, your Who is the successor? So, there are some options at every location, at least two people.
Reporter: Have you seen your future shadow (successor)? Will you often encounter it in the office building?
Luo Bangmin: Of course, they are people who know each other well. I will be asked every year when I evaluate it. Mark, if you leave this position, who will replace you? I say who is who, and then decide with the boss. For example, I personally received an appointment to come to China at 12:30 in the middle of the night (Tokyo time). Our senior vice president of human resources called me and asked if I would like to come to China. I said that of course I am willing to come to China with such a task, I feel very honored.
Reporter: What is the biggest confusion of GE China in adapting to local laws and business environment in recent years? Is there any trouble in government relations and competition with local companies? Can you give some examples?
Luo Bangmin: Financial services is an example. Financial services is a big business of GE. It accounts for more than 40% of global sales. We certainly want to do this big business in China, but some internationally popular regulations cannot be used in China. Implementation, for example, the 3A credit rating is very important for the leasing company. To do leasing, one key is that we must borrow money at a very low cost in the market and get a lot of liquidity, which is for the leasing business. It is a basic condition, but at present, the 3A credit rating does not bring any benefits. Another obstacle is that the globalization of our products is not fast enough. We are accelerating this progress because local companies are growing very fast and market competition is becoming more and more fierce. We must use the fastest speed to come up with the best global. Chemical products.
Exclusive interview with Aladdin Lighting Network:
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