case study sap establishing a research center over china

Country’s situation includes three points. One of these three points is that at the beginning of 1990s, China enforced a practical policy which is called—change market for technology. Secondly, according to more than 20–year-long experience of joint venture with other countries, we can know that it is unwise for domestic enterprises to continue to take this way to develop themselves. The last point is our country complement another policy—independently innovates.

Anderson Consulting (now Accenture) is a large and diversified IT consulting company. In the area of enterprise business software it provides solutions to clients on a global basis. Andersen had at that time over 15,000 IT consultants dedicated to help clients improve their business result by implementing IT solutions. The strength of Andersen’s global capability with respect to SAP was embodied in the wide breadth of methodologies and tools offered to their customers with their SAP implementation. Because their clients’ strategies vary widely, Andersen actively investigates and evaluates both SAP tools and third party tools. Andersen also has invented its own tools to fill specific SAP functionality gaps or to meet specific customer requirements. Furthermore, Andersen tools are always consistent with SAP approach and complementary to SAP tools. In other words, Andersen seemed to be a most trusted consultant for implementing SAP systems.

Second, China is facing strong competition in low-end manufacturing, like Mexico, Cambodia, Laos, India and Vietnam. Asian countries like Cambodia, Laos, India and Vietnam have a lower living cost than China and Mexico has geographical advantage since it is closer to America. And fast-paced inflation, the increasing cost of raw materials, the rise of wages and other costs have pushed China to a less competitive position.

China is the largest market in the world, and probably the hardest business environment. This narrative reflex China’s immense diversity, complexity, and its enormous competitive intensity is unrivalled versus the world.

This paper presents the results of the authors’ detailed research into competition between multinationals and local Chinese companies in 10 industries over the past five years. They conclude that local companies are now threatening multinationals’ plans to conquer the China market. They analyse this new competitive game in terms of a dynamic battle of competencies. Multinationals start off with better industry-specific technology and know-how, and a higher level of competence in key functions like marketing and financial management. Chinese companies enjoy a better understanding of the local market, lower

The computer software industry is a relatively new development on the international market place. Only a few decades ago, there was no such industry at all. Thanks to a number of innovative software developers, the rise of the industry has become a booming success. The industry itself increased dramatically in the 1990s. It was during this period that software was growing in a number of other supporting industries. Software soon became an integral part of industries like healthcare, business applications like databases and network structures, personal finance, and education (Kent & Williams 1997). The more intertwined it became with other business applications, the more successful software became as a

laws are changing more rapidly now that China is seeing foreign companies show up. China is

Plattner’s financial success story began in 1972 when he and four colleagues quit IBM, to launch the German software company called SAP SE. This German multinational software corporation that makes enterprise software to manage business operations and customer relation went public in 1988 and is still a successful corporation today with over 74,000. Plattner stepped down from his position as CEO in May 2003 as has since served as the chairman of the supervisory board.

With China emerging as a global power in business within the last decade, knowing about doing business in China has become more important than ever. There are both many advantanges and challenges with doing business in China in this modern era, and understanding both sides of this coin is the key to being successful in China. Some aspects to keep in mind include the cultural barrier, the price of the work force in China compared to the United States, and have the “made in China” brand be accepted back in the United States.

International competition will increase as Chinese companies losing their domestic market will invest more in India

Fock, H K. Y. and Woo. K.S. (1998). The China Market: Strategic Implications of Guanxi. Business Strategy Review, 9(3):

In 1972, five entrepreneurs had a vision for the business potential of technology. Dietmar Hopp, Hans-Werner Hector, Hasso Plattner, Klaus Tschira, and Claus Wellenreuther founded SAP in 1972. SAP means Systemanalyse und Programmentwicklung which is German for "System Analysis and Program Development.” The name was later changed to Systeme, Anwendungen und Produkte in der Datenverarbeitung which meant Systems, application and products in the data processing in German.  With one customer and a handful of employees, SAP set out on a pathway that would not only transform the world of information technology, but would alter the way companies do business forever across the globe. Based on market capitalization,

The main concern is with the SAIFEC regulations which limit overseas equity by the Chinese workforce. These regulations should be researched more precisely because if the limit is too low it might not make sense to export the Silicon Valley model.

SAP is a software company whose main product is an Enterprise Resource Planning (ERP) software. SAP was founded in 1972 in Walldorf, Germany under the name System Analysis and Program Development. (SAP) SAP has more than 54,000 employees with sales and development locations in more than 50 countries. Their revenue in 2010 was € 12.5 billion and based on market capitalization, SAP is the third largest independent software manufacturer. SAP has over 176,000 customers in over 120 countries and markets and distributes its products and services primarily through local subsidiaries. (SAP)

Political & Legal environment: The political system of a country is an important part of a companies marco-environment. ‘Who governs the country?’ ‘What does the government follow?’ and ‘What legal regulations follow from these policies?’. The most important factors a company is subject to are policy uncertainty, macro instability, and tax rates. Considering China is a country in transition all of the above factors are subject to change, to a degree substantially larger than it is in stable developed countries. We have recently seen changes happening in China on all of the above factors. One example is the new regulations regarding copying, which turned out in favor of Starbucks. However, what will happen in the (near) future is hard to tell. Whatever happens though, Starbucks will be subject to the consequences, whether positive or negative.