Exploring China - Globalspec Search Engine

Executive Summary

GlobalSpec is a specialized search engine for the engineering, manufacturing, and industrial community. They provide a domain-expert search tool which allows users to browse online product catalogues, millions of pages of published engineering content, as well as product and industry e-newsletters. All of these tools are designed to give the user the ability to perform their job at their highest level of accuracy and productivity. GlobalSpec has nearly six million registered users, most of whom are registered in the United States; however there is quite substantial presence of international users as well.

The purpose of this paper is to study the feasibility of GlobalSpec expanding their business and sales force into the Chinese market. It is predicted that by 2011, China will become the number one manufacturing country in the world, surpassing the United States. It would make sense to explore the possibility of GlobalSpec expanding into this giant manufacturing country.

About GlobalSpec

Since its creation in 1996, GlobalSpec has grown into the leading specialized search engine for the engineering, manufacturing, and industrial community. With nearly six million registered users, growing by more than 20,000 new registrants each week, GlobalSpec is becoming "the place" for the engineering community to gather and conduct business.

GlobalSpec provides its users with a wide array of products and services. The main component of GlobalSpec is their web-search tool, which is an integration of the SpecSearch database and the Engineering Web. The proprietary SpecSearch database is a database of searchable original equipment manufacturers' (OEM) and distributors' product catalogues. This is composed of over thirty thousand digital catalogues containing more than 2.1 million products and over 148 million searchable product specifications. The Engineering Web is a vertical search engine which has hundreds of millions of pages of indexed engineering content, drawing both from the internet and proprietary content publishers. The latest of GlobalSpec's offerings is their sixty nine (and growing) product and industry e-newsletters.

GlobalSpec offers its clients a medium to reach the worldwide engineering audience unlike any other. Through a range of marketing services, companies can receive qualified filtered sales leads, product announcements and promotions, brand advertisement, and a range of e-media advertising and marketing services. Companies on GlobalSpec's website receive full contact and measured sales leads by integrating their parts and products into the SpecSearch database, banner ads and cost-per-click programs (CPC) on the Engineering Web search engine, and through a variety of additional promotional programs such as e-newsletters and GlobalSpec's online tradeshows and conferences.

GlobalSpec has worked very hard to create an innovative search engine and linking database which can facilitate the industrial and manufacturing community. Through extensive innovation, GlobalSpec has managed to captivate this professional engineering audience. Since this audience is at the heart of the manufacturing world, users are able to capture their target market directly and easily with sales programs and measurable brand advertising services.

China's Political Outlook

China has been governed by the Communist Party of China for the last 60 years. The political power in China is distributed, complex and highly competitive. Chinese government is managed by the state council, which is headed by premier. Based on Chinese constitution "National People's Congress (NPC) of the People's Republic of China is the highest organ of state power." But NPC performs as a subordinate to the state council. Although there are other minor political parties but their powers are restricted as they operate under the leadership of the Chinese Communist Party. The policy decisions in China are driven by bureaucratic and non-central government actors apart from the Communist Party leadership. Business sectors in China also pressurize Chinese government in policy decision. China's basic constitution principle is freedom of speech, of press, of assembly, of association, of procession and of demonstration. Chinese officials restrict these freedoms on the ground of safe guarding "state secrets".

China officially has 34 provincial-level governments; mostly the political power resides with central government to "conduct the administrative work concerning the economy, education, science, culture, public health, physical culture, urban and rural development, finance, civil affairs, public security, nationalities affairs, judicial administration, supervision and family planning in their respective administrative areas."

The biggest challenge and question facing China is the move toward democracy. Whereas most of the emerging economies have moved towards democratic system of governing, China is still governed by one party system. Even though China has seen growth with one party system, the growth has fueled regional economic imbalance. The eastern seaboard of China consisting of Tianjin, Shandong, Jiangsu, Shanghai, Zhejiang, Fujian and Guangdong provinces has seen the growth due to presence of industries and foreign direct investments. Fueled by this growth in the eastern seaboard, people from the western region are migrating which has prompted the Chinese government to start economic development activities. From a political outlook perspective, new generation of leaders are being prepared to take power in 2012-2013 which should ensure the continuation of reform and modernization. The greater threat to China's political stability is growing corruption, widening inequalities between regions, increasing rural poverty.

Economic Outlook

China is the fastest growing major economy in the world. China has a massive trade surplus and huge currency reserves which serve as a backup for any major economic issues. In 2009, China was the second largest economy of world and its GDP grew 8.7 %. Unemployment during the year 2009 was 4.8 % which was 0.6 % higher than previous years. China's GDP rose 11.9% y-o-y and growth was attributed to real estate growth. The local governments have been spending more on the infrastructure projects. Property prices across the country have increased in the last one year due to the stimulus package that was announced by the Chinese government to tackle the global economic slowdown. The Chinese government faces numerous economic development challenges, like environment degradation due to economic growth, increasing corruption in various governments, and