People Work Long Hours In China' S Factories And Service Businesses

Business.

To make great cost reductions start with a global perspective - everyone today is excited about the opportunities to sell products to china' s more than one billion people. How can you use cost reductions for beneficiaries, and customers to, users expand the size of the market for your offerings by 20 times while earning an attractive profit?

To turn that opportunity into reality will require substantial changes in your offerings. - imagine that you are a vehicle manufacturer. You quickly notice that there aren' t enough roads in China for everyone to be driving around at the same time. In most developed countries, the annual operating and depreciation costs of a fairly new vehicle total around$ 4, 00How can you as the vehicle manufacturer eliminate more than 95 percent of that cost for the new Chinese customer? In fact, many roads are already filled to capacity with bicycles and motor scooters, which take up much less room than cars, and SUVs, trucks. People work long hours in China' s factories and service businesses. In addition, most of these prospective customers don' t make much money.

When they are done, they have little time for leisure. - that' s a problem for chinese people who recently moved to the expanding industrial cities but want to be able to see their elders, who often live far away in agricultural areas. Because most people walk or bicycle to their jobs, people have to live close to their work. Wouldn' t a Chinese person' s heart be thrilled by being able to drive home for a weekend visit? In the countryside, the roads aren' t as good. . . but they are less crowded. Long before someone could afford to buy a car and take such a jaunt, many could afford to take driving lessons and rent small, vehicles for such, but attractive homecoming visits.

The pleasure and pride that come from being able to visit the elders more often would soon be associated with the car, creating the potential for a powerful brand that people would also want to use when they are more affluent, particularly if step - up models are later offered. - it needs to be rugged to work well on those country roads. Let' s look at the car first. But it also needs to convey status and family reverence. It can be hard to find gasoline in some rural areas of China. If the car uses little gasoline, that' s good. Perhaps it would be a good idea to have great fuel efficiency and a large gas tank.

That would allow room to take three rural family members for a spin while back in the ancestral village. - with many chinese nuclear families having only two or three people in them, the car could be a four seater. What you are describing is a Chinese - styled, updated version of the popular Ford Model T in the United States and the original Volkswagen beetle in Germany. . . with a few more amenities. If as a vehicle manufacturer you own the network, you will be able to exclude competing cars while you are establishing brand loyalty. You also need a rental network that' s well run. To make your brand more appealing, you may also want to sponsor festivals that are associated with honoring family elders and ancestors.

This would be a good model to use in auto races, following on the U. - to appeal to the step - up market, you will want to have another car model that' s sportier looking and faster. You seem to have a pretty good business model for slashing annual costs through auto rentals. NASCAR model of racing. What have you forgotten? If you design your vehicle in the right way, the car can be inexpensively customized in appearance for each of the other large - population underdeveloped nations such as India, Brazil, Indonesia, and Nigeria. People working in newly industrialized areas in other underdeveloped countries also want to visit their families and home villages by car.

With that base, you are in a position to be the dominant vehicle manufacturer of the future as the bulk of the vehicle market shifts from the developed to the emerging market nations. - what cost - reduction opportunities does considering the global market open up for you? Based on creating a way for a family to take a trip home by car for less than$ 200, you have opened up a vast new rental market that will ultimately become an ownership - based market as affluence broadens and more roads are built.