Beyond the Great wall

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Beyond the Great Wall
Intellectual Property Strategies
for Chinese Companies

Since its founding in 1963, The Boston Consulting Group has focused on helping clients achieve competitive advantage. Our firm believes that best practices or benchmarks are rarely enough to create lasting value and that positive change requires new insight into economics and markets and the organizational dynamics to chart and deliver on winning strategies. We consider every assignment to be a unique set of opportunities and constraints for which no standard solution will be adequate. BCG has 63 offices in 37 countries and serves companies in all industries and markets. For further information, please visit our Web site at www.bcg.com.

Beyond
the Great Wall
Intellectual Property Strategies
for Chinese Companies

David Michael
Collins Qian
Vladislav Boutenko
Ralph Eckardt
Mark Blaxill

January 2007

www.bcg.com

© The Boston Consulting Group, Inc. 2007. All rights reserved. For information or permission to reprint, please contact BCG at: E-mail: bcg-info@bcg.com
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USA

Contents
Note to the Reader

4

Executive Summary

5

Competing on the World Stage

6

Understanding the Five Phases of IP Development

8

Phase 1: Driving Growth Through Exports

8

Phase 2: Climbing the Value Ladder

9

Phase 3: Paying the Price

11

Phase 4: Getting Serious About Intellectual Property

14

Phase 5: Profiting from Intellectual Property

19

Closing the IP Gap

21

For Further Reading

22

Beyond the Great Wall



Note to the Reader
This research report is a joint product
of the Strategy practice and the
Technology and Communications
practice of The Boston Consulting
Group. The authors welcome your
questions and feedback.

For Further Contact

David Michael
BCG Beijing
+86 10 6567 5755
michael.david@bcg.com
Collins Qian
BCG Shanghai
+86 21 6375 8618
qian.collins@bcg.com
Vladislav Boutenko
BCG Moscow
+7 495 258 34 34
boutenko.vladislav@bcg.com

Acknowledgments

The authors acknowledge the
contributions of BCG’s global experts
in strategy and in technology and
communications. They extend special
thanks to David Dean, a senior vice
president and director in BCG’s Munich
office and the former global leader of
the Technology and Communications
practice, and to Michael Deimler, a
senior vice president and director in
BCG’s Atlanta office and global leader
of the Strategy practice.
In addition, the authors would like to
thank Amit Nisenbaum, project leader;
Daniel Maloney, associate; and Laura
Rees, associate. These colleagues
formed the project team that supported
this research. Finally, the authors
express gratitude to the following
members of the BCG editorial
and production staff: Barry Adler,
Katherine Andrews, Gary Callahan,
Matthew Clark, Mary DeVience, Elyse
Friedman, Kim Friedman, and Mark
Voorhees.
David Michael
Senior Vice President and Director
Collins Qian
Vice President and Director
Vladislav Boutenko
Vice President and Director
Ralph Eckardt
Former Manager
Mark Blaxill
Former Senior Vice President



Executive Summary
Over the past five years, a rapid rise in exports has
driven an unprecedented level of prosperity in
China, fueling the nation’s emergence as an economic powerhouse. To sustain its trajectory of impressive growth, China will become even more reliant on exports. That means that Chinese companies will need to become ever more sophisticated about

operating in global markets.
•  ntellectual property (IP) strategy is one of the arI
eas in which it is most critical that Chinese companies boost their sophistication. Despite rapid and well-documented improvements in the IP system
within China, Chinese companies still lag...
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