by

China’s richest businessman Wang Jianlin first ventured overseas in 2012 when his company Wanda Group acquired U.S. cinema chain AMC Entertainment for $2.6 billion. Since then, there’s no stopping him.

He built his empire on property but is aggressively expanding beyond China’s borders. In his speech in front of a group of Harvard Business School students last year, Wang Jianlin said since the purchase of AMC, he has invested over $15 billion overseas. He also said he plans to generate more than a third of its revenue from overseas operations by 2020.

“This is part of our process of transformation from a Chinese company to a global company,” Wang Jianlin said.

DALIAN/CHINA, 12SEPT09 - Wang Jianlin, Chairman and President, Dalian Wanda Group, speaks during the Success versus Survival in a Global Downturn session at The World Economic Forum Annual Meeting of the New Champions in Dalian, China 10-12 September 2009. Copyright World Economic Forum (www.weforum.org/Natalie Behring)

DALIAN/CHINA, 12SEPT09 – Wang Jianlin, Chairman and President, Dalian Wanda Group, speaks during the Success versus Survival in a Global Downturn session at The World Economic Forum Annual Meeting of the New Champions in Dalian, China 10-12 September 2009.
Copyright World Economic Forum (www.weforum.org/Natalie Behring)

Wanda Ramps Up Diversification

Currently, Wanda Group owns Sunseeker International, a UK-based maker of luxury yachts, the Hoyts cinemas in Australia, and the World Triathlon Corporation, among others. Most recently, the group acquired Legendary Entertainment, the Hollywood production company behind “The Dark Knight,” “Jurassic World” and “Godzilla” movies.  The acquisition was dubbed China’s biggest-ever cultural takeover and made Wanda Group the highest revenue-generating film company in the world.

In an effort to move away from China’s property market, which has been hit by a slowing economy, Wang Jianlin has expanded his portfolio to include cultural developments, internet finance business, theme parks, sports teams and even Hollywood studios. His eagerness to diversify his investments is partly due to his belief that the greatest opportunities in China lie in the service industry. According to him, there are three particular industries that are poised to achieve a significant growth: entertainment, sports and tourism. Hence, we now understand the reason behind his global expansion and portfolio diversification.

Related:  The Development of Technical Writing in China

Wang Jianlin’s Global Ambition

But another more sentimental reason for going global is perhaps his ambition to make Wanda a truly international brand. “I’m still on my way to get where I want to be,” Wang Jianlin said. “The way I defined success for myself is to lead Wanda to become a world-renowned company or being in the top 10. That’s my dream.”

However, he admitted that going global is not easy. He said aspiring Chinese companies need to equip themselves with knowledge of local regulations, corporate culture and management styles of the target customer base. The greatest challenge in managing an international acquisition probably lies in retaining the original management. “If you buy a company, but all the original management leave, you’ve probably already failed,” he said.

When acquiring foreign firms, Wang Jianlin said he never assigns anyone to those companies. Instead, he keeps the existing team and designs a reasonable and an effective incentive system to motivate them. “When an American company acquires a Chinese company, they usually send in a team of Americans, and this is destined to fail,” he added.

So we hope you can take a few lessons from Wang Jianlin’s successful global journey. The abundance of his capital may be his most apparent strength, but he has also proven that good management skills and the commitment to understand cultural differences and local regulations in foreign markets is crucial. He stressed the importance of maintaining the original management after acquiring foreign firms, trusting that the existing team knows best when it comes to operating a business in their own market. Finally, Wanda’s diverse portfolio teaches us that Chinese companies need to better understand future trends and be bold enough to make the necessary changes in strategy in order to adapt to the ever-changing markets.

If you’re interested in learning more about CSOFT’s globalization and localization solutions, visit our Twitter, Facebook, or LinkedIn pages or you can visit our webpage!