Alcohol is traditionally of great demand for the large fraction of the US population. The demand for alcohol is generally inelastic that allows keeping prices at a comparatively high level. However, this business is very difficult and contains a number of problems for entrepreneurs. William Lu has helped me to understand the essence of his business strategy and approaches to entering new international markets. Moreover, William offers his personal perception of American culture as well as potential opportunities and threats of his business. I have selected William Lu for this interview because he has relevant experience, and he is an open person who may provide me with good recommendations. The main focus of the interview is on his professional approach as well as his personal perception of the existing business reality.
William Lu agreed to participate in the interview and answered key questions that were interesting for me. He is 42 years old, and he is from China. He has large experience in this field of business as his father established some kind of alcohol production and distribution long time ago. Before coming to the US, he improved his entrepreneurial skills in China. At the same time, William Lu paid additional attention to his theoretical education. He understands that it is impossible to become the successful entrepreneur without understanding the foundations of the market economy on a theoretical level. William Lu had 16 years of schooling; his specialization is business management and international business. Moreover, William went to the training section for alcohol tasters in order to receive adequate certification. Thus, his educational strategy was twofold. On the one hand, he received deep knowledge in theoretical economics, business, and management. On the other hand, he was additionally focused on his sphere of business. It seems to be correct to use this strategy as it allows one to verify all theoretical propositions and determine the most optimal solutions.
In the beginning, William Lu supplied his alcohol to “one of Chinese Americans” (Lu). He says that this entrepreneur used hi own brand name, but he cannot specify it because it constitutes a trade secret. Afterward, he decided to expand his operations. It seems that William used his initial contacts in order to better understand the structure of the US market. He was able to operate on two markets simultaneously, namely on the Chinese and American ones. His revenue in China is between $3,000,000 and $4,000,000 per year. It demonstrates that his market positions are very strong. Moreover, his profitability is 35% that is very high as well. The revenues in the US market are smaller; they constitute the amount between $800,000 and $1,000,000. However, Lu suggests that this market may become even more important than the traditional Chinese one because the general economic environment in the US is more attractive for business people. In particular, he claims that high taxes are introduced in China. Therefore, if other things are equal, it is reasonable to reorient production in the direction of the US market.
Moreover, Lu predicts that the tendency will remain the same in the near future, and the US market will become more attractive in comparison with the Chinese one. The main reason for it is the existing government regulations that are introduced in China. Additional taxation and regulations are supposed to appear that will reduce the profitability of operations. Therefore, William is becoming more oriented on the US market.
Lu says that he believes that higher exports to the US may generate additional revenues for him. He explains that the costs associated with the workforce in China are comparatively low, and the prices are comparatively high. Thus, the level of profitability may be sufficient. Lu suggests that he may use his marketing abilities to stimulate the market demand in this segment. He also says that a large number of Chinese immigrants prefer domestic alcohol. Therefore, the customers’ base is sufficient. At the same time, he constantly seeks ways for improving his market positions.
William makes visits to the US when the situation requires them. He usually personally participates only in large deals. In the day of the interview, his business deal was equal to about $200,000. William knows a large number of details associated with the production of alcohol. The quality of alcohol may improve over time. Lu says that he “has to drink a lot when he meets with customers” (Lu). It means that he demonstrates the quality of his alcohol and guarantees the highest standards for all consumers.
William says that “innovation is our motto” (Lu). He encourages creativity and new ideas that may be proposed by his employees. It is the main source of long-term competitive advantages. He understands the importance of language and cultural barriers in organizing business in the US. Therefore, William pays additional attention to his English, and now he is able to freely communicate with his American colleagues. He suggests that Americans are kind and open people; however, all their cultural characteristics should be investigated and examined. Lu says that it is important to be optimistic and goal-oriented in order to achieve success in this business.
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Thus, William tries to adopt “different modes of structural incorporation” in his business (Portes and Manning). He understands the importance of diversifying his business in order to increase its stability and optimize existing risks. Lu also demonstrates that race and ethnicity are closely related to entrepreneurship (Sociology 121). Therefore, successful business people should take into account all aspects of their environment. In this way, they may address the existing consumers’ needs and receive higher profits.
The business progress of Lu may be partially attributed to his innovations and a permanent process of self-improvement. He believes that all available theoretical models should be correctly applied to the actual market conditions. Therefore, he investigates the dynamics of consumers’ preferences and existing technologies. Lu demonstrates that government policies directly influence business decisions of entrepreneurs. In particular, taxation policy is very significant as it directly influences the profitability of business deals.