Innovation In China’s Company----LI NING

Unlocking innovation in China (Cisco,2009)
Increased innovation, it argues, will be vital for China to move up the technological ladder to produce high-value goods and services. Indeed, homegrown innovation could be vital to solve many of China’s challenges, such as energy productivity and pollution, and to position Chinese companies competitively in the global market.

China’s companies are keen to contribute to the drive towards innovation. Several of China’s companies have emerged as able innovators. For example, BYD, a manufacturer of cars and batteries, started out in 1995 making inexpensive nickel-cadmium batteries, used mainly in toys, before going on to produce pricier batteries for mobile phones and power tools. It now manufactures the world’s first mass-produced plug-in hybrid electric vehicle, which went on sale in China in December 2008.

Competition spurs innovation: Li Ning counts
on R&D and supply chain management

                                                                         Li Ning, China’s largest domestic sportswear brand, not only needs to fend off multinational sportswear giants Nike and Adidas, but also needs to stay ahead of its increasingly savvy domestic rivals, including brands such as Anta and 361°. Such mounting competitive pressure has turned into a major driver for innovation, confirms Guo Jianxin, Li Ning’s chief operating officer.

To keep up, Li Ning is supporting big initiatives to improve its R&D and fuel creativity within the company. In 2008 Li Ning invested in a sports research lab at its new Beijing headquarters, creating one of the world’s top centres of biomechanics, the science of body movement. Li Ning is also supporting new ideas through a group of initiatives it has dubbed "cross-over”, which aim to tap the creativity of people outside the company by, for example, challenging architects and construction engineers to try their hand at designing shoes. In 2007 the company opened a new research and design centre in Portland, Oregon, where it employs international researchers and designers. Li Ning rotates its Chinese design staff through the centre to give them more international exposure.

Li Ning’s efforts to generate new ideas is part of a national trend. Once mostly imitators, more brands in China are now striving to define themselves to consumers through their own distinct products and designs.

But much of the innovation at Li Ning is going on in a less showy arena—its supply chain management. In 2006 Li Ning formed its Pilot Project Team, headed by Mr Guo. The team is charged with making the company’s supply chain processes more efficient and to cut costs, which had spiralled upwards owing to China’s rising costs of production and the growing complexity of Li Ning’s organisation. Li Ning also re-engineered its supply chain management to adopt a demand-driven approach, which allows its wholesalers to change their orders quickly depending on how well products sell.

http://www.finfacts.ie/biz10/EIU-Innovation_China-Cisco.pdf


Comment:

 Most companies in China have built up the innovation system such as the human resources and management capacity. The innovation system is very effective for companies to operate; LI NING Company is an example. It made as much as effort to generate the new ideas and its supply chain management is defined to cut costs and adopt the innovative approaches to compete with other companies. Now, many companies have fostered innovation leadership in China. This kind of leadership can motivate employees and strengthen the development in long run of company.