Services - Partner Search
& Due Diligence
The Wrong Way and the Right
Way
Finding the right partner in China is a
critical matter- whether this is a joint venture
partner, a channel or technology partner. Getting set up
with the right (or wrong) partner(s) is a key structural
issue that could make or break one on this market. Too
often, however, partnerships are made haphazardly,
and/or without sufficient investigation of the
candidate. In the first instance, "matchmakers" often
recommend who they know, have heard of, or are connected
with in some way. This way is lazy, or even
disingenuous.
GCiS is not a "matchmaker." We use
systematic research to fills both of these needs. We
have a Partner Search Program to find the most
appropriate partner, and to perform due diligence on
final candidates. In a market as diverse and complex as
China, this is the right way to do it.
Three Phase Approach
Screening and selection of partners is a practical
exercise, with an explicit goal. Based on our
experience doing this in China, we have designed
a program consisting of three basic phases.
Each phase is designed to optimize time, focus
and coverage, and to provide opportunity for
intelligent, cooperative segmentation and analysis.
The objective is establish one or a set of partners
that will cover best match the client’s
requirements. This is what might be referred
to as a “matrix matching process”.
One axis of this matrix are product, business
area (industry) and geography (such as in distributor
searches).
The process will vary based on the type of
search and the client. In some cases, for example,
the total universe is 100 companies, and in
some closer to 1000. In Phase 3, there can be
as many as 50 interviews for a single target,
and rarely fewer than 15. GCiS has a Database
of over 70,000 companies in China, so we typically
do not have to go out of house for Phase 1 Research.
To summarize, the phases are:
Phase 1: Initial Screening (based
on Client's criteria)- Filtering of companies
for Ph. 2
Phase 2: In-depth investigation, often in-person-
final selection for Phase 3.
Phase 3: Due diligence of final candidates-
intensive research of each company (with
the company itself, competitors, vendors,
creditors, etc.)
Key Data Points
Examples of categories covered in Phase 2 are
show here. This is an example only, as different
projects and needs will have different requirements.
o Company essential background info
o Company management
o Primary businesses
o Secondary businesses
o Current market view
o Market development view
o View of development of services
o Verification/correction of round 1 information
o Explanation & verification of IP
o Financials (as possible)
o Details of key projects
o Details of key partnerships
o Summary of general market reputation
o Interest in joint venturing
o Summary of how partnership should work
o Other (varies by project, company)
At the end, all results and analysis are collected
in a study, and recommendations made. There
is normally significant client interaction throughout
the process, and consultation afterward. In
addition, some companies choose to work with
us in one part of this program (eg, Phases 1-2),
and do the rest themselves.
Target Investigation/ Due Diligence
When evaluating companies in China for investment
or acquisition, legal and accounting checks
are not enough. The GCiS Investment Due Diligence
Program is an extremely thorough system of primary
research designed to paint the broadest picture
possible of the target. In addition to standard
company and management due diligence, this also
consists of interviews with suppliers, customers,
competitors, creditors, relevant government
officials, or whoever has knowledge relating
to the target. Key areas examined are:
o Financial
o Market
o Product & Technology
o Management
o Price Modeling
The final analysis is designed to provide as
strong support possible for decision-making,
with or without “Go/No Go” Recommendations.
All analysis and recommendations are supported.
To receive further information on the GCiS
China Partner Search, please e-mail us and request
the China Partner Search PDF File. |