Scaling up creativity. Finpro Luovimo company internationalization story. More info at http://www.finpro.fi/luovimo/scaling-up-creativity

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08 June 2012
PES-ARCHITECTS – GROWTH IN QUALITY
The story of PES-Architects demonstrates how hard work with world-class know-how and
high risk can create extraordinary projects which add high value in company’s core
competences.
Company background
PES-Architects Limited – founded in 1968, is one of the leading and most international
architectural design firms in Finland. PES-Architects’ mission is to be an innovative, reliable and
co-operative design partner for demanding clients.
The planned and built projects include complex public buildings like theatres, airports, and
railway terminals. In addition, PES has also designed and built demanding university buildings,
schools and sport facilities, retail developments, office buildings, and housing developments.
Besides architectural design PES Architects’ line of activities includes interior design, urban
planning, structural design and project management. The company operates in Finland, China
and Russia.
PES-Architects’ internationalization path started in the 1990’s economic downturn when they
had to start to look for new projects outside Finland. The company was very successful in
Germany winning various design competitions and other prizes, Marienkirche Concert Hall in
Neubrandenburg being one of their high-quality references.
In year 2003 PES-Architects started to enter Chinese architectural competitions and the
company has worked in more than 60 competitions and design commissions in the cities of
Shanghai, Wuxi, Chengdu, Hangzhou, Beijing, Guangzhou, Shenzhen, Nanjing, Shenyang,
Wuhan, Hefei, Nanning, Kunming, Yunnan, Beihai and Lianyungang. PES-Architects has won
ten 1st Prizes and their latest works include Wuxi Grand Theater and Chengdu IconYuanDuan
Super High Rise Tower.
Extraordinary projects result in extraordinary competences
PES-Architects joined the Luovimo project at the time when their business in China was
developing rapidly. PES had worked in China with Chinese partners since 2003 but in order to
deepen its presence on the market there was a need to study different options. Finpro made an
analysis of different entry modes and their characteristics and supported PES to crystallize the
final entry mode including company form, location and operations in practice. Later on Finpro
also carried out the establishment of the company in Shanghai within a TEKES financed
program.
PES Architects’ success in China has come from a combination of hard work, delivering highest
possible quality and risk-taking attitude.

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08 June 2012
In China everything is large and fast. The market has provided PES Architects with
extraordinary projects pushing the company to open-minded product development including
new materials and methods. As an example, the experience in designing the 195 m high
Chengdu tower or the mighty Wuxi opera house has added high value in company’s
competences which can be utilized in other projects as well. Now the target is to get even more
remarkable projects with better margin but at the same time keeping in mind that the growth and
employing more people require a lot of focus to be put in keeping the design quality.
Success comes by taking risk and by navigating with patience in the local business
culture
In addition to having world-class quality, good personal relationships are vital in China; an active
local presence is a prerequisite. PES Architects has developed an own business model for
China which comprises the personnel of PES Helsinki, PES Shanghai and a local Chinese
partner.
Getting acquainted to the local business practices often happens by trial and error. It takes time
– up to 5 years - to figure out how to navigate in the Chinese business culture with its own
specific communication and decision structures. Chinese hierarchic organizations seem quite
chaotic from the Finnish perspective and one cannot take the outspoken decisions of lower
positioned directors for granted.
Different business practices in China also challenge current financial solutions for
internationalization. Chinese want first to build trust by working together before signing the
contract as the Finns are used to requiring the contract to be signed first before starting the
work. In China conscious – sometimes even daring - risks need to be taken by doing work
without a contract (often up to 30 %) in order to get the contracts finally signed. Intensive local
presence is needed to build the trust. At the same time, one should keep in mind that the
Chinese people like to bargain about everything and also the best Finnish practices and values
should be maintained, utilized and strengthened.
PES supports the state initiative to gather creative industry companies together in the Luovimo
project. In case more architectural/design companies would have participated the learnings from
other companies could have been of more value. However, a fruitful co-operation with another
Luovimo company ACE-Production was started in China. Both of the companies target the
largest cities in China and a common offering together with marketing material was created in
Luovimo’s co-creation phase.
It’s important to combine Finnish forces in China and PES-Architects has also involved other
Finnish companies in their Chinese projects. However, a foreign company can get competitive
advantage in China only by giving in their first-class team; a second-class team will not have a
chance.
Read the 7 findings in internationalizing creativity from Luovimo companies at
http://www.finpro.fi/luovimo/scaling-up-creativity