“Budgets are usually, if not always, insufficient, always vastly overstated and highly vulnerable to the whims of management. All to often they are slush funds for various purposes or simply re-allocated to margins when things go bad.”As if that isn't bad enough, and as Doctoroff points out, the focus on scale is another problem. At big companies it is rarely accompanied by innovation. Smaller players which are more open to innovation, lack the scale required to expand. A Catch-22, you could say. And that's before we consider the acquisition option, which appears to be flavour of the month right now. I imagine this will start to become a reality but Lenovo's experience is ample evidence of the inherent risks. Clearly, as we have seen from Haier, Chinese businesses can succeed overseas, albeit on the same commoditised terms upon which they rule at home. Whether they can take the step up to creating genuine brand equity looks unlikely to happen in the short-term at least, until this becomes a requirement for success in its home market. (Interestingly, one of the brands tipped for success in my feature is MSN clone QQ. In the internet market, you could argue that China's brands have displayed considerable innovation - and by targeting its overseas diaspora there may be the potential to export these models.) Neither does the 'Made in China' tag inspire confidence right now. On all fronts, it is the kind of marketing challenge that agencies should be queuing up to tackle, assuming they could eventually drive change. Update: David Wolf has a thoughtful view on this at his Silicon Hutong blog. Definitely worth a read.
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