Ping An Insurance (Group), China's second largest insurance company, recently announced publicly its intention to team up with Tencent Holdings, the third largest Internet company in the world, and Alibaba Group, the operators of China's largest e-commerce platform, to deliver online financial services, an extremely innovative move.
Ping An's putative alliance with two of China's leading Internet companies represents a clear change in corporate strategy among Chinese companies. Not only is this move bold and ambitious, it also paves the way for much-needed international expansion. Only a few years ago such an alliance would have been considered highly unlikely.
Ping An's announcement also illustrates far more coherent strategic thinking and planning than what is often associated with Chinese companies. Good management is often not as much about building on a company's strengths but more about understanding weaknesses and recognizing that in order to grow an organization it may well need the help of others.
Tencent and Alibaba will not only enable Ping An to reach hundreds of millions of younger potential customers, they should also allow Ping An to piggy back on the "exciting", "fun" and even "cool" image that both corporate brands enjoy.
However, what remains unclear is the way these organizations will fit together. Most joint ventures fail due to a clash of corporate cultures and management styles but this may not present such an obstacle here if there is little actual merging or collapsing of the organizations.
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