Marathon County, Wisconsin, wouldn't seem to be the natural home for "wild" (a.k.a. American) ginseng , but it is.
"The climate here is perfect for growing ginseng ," shrugs Paul C. Hsu, president of Hsu's Ginseng Enterprises, the leading U.S. exporter of ginseng - accounting for 20% of the nation's $60 million in ginseng exports. It's not just the coals-to-Newcastle aspects of his business that are unusual.
Hsu came to this part of the country via Taiwan in 1971. "When I started my company as a mail-order business in 1974," says Hsu, 52, "I didn't have much capital or time. I began working with local farmers, exporting the crop to Taiwan, where my brother lives, and Hong Kong in 1975." But, as the demand became high and the supply short, Hsu realized he'd have to grow. He chose a two-stemmed approach: First, in 1978, he bought a 160-acre farm in Wausau, Wisconsin, and began growing the crop himself. Then, in 1981, he started working on exporting his product to the then-closed People's Republic of China.
Since 1981 Hsu has diligently attended state trade missions and participated in worldwide trade shows to cultivate Chinese contacts - even though China wasn't open to American commerce and foreign investors until around 1988.
Throughout, Hsu remained undaunted. During the '80s, he was appointed by the governor of Wisconsin to serve on the Wisconsin Governor's Advisory Committee on International Trade. The company was also selected to be a participant of the Wisconsin Governor's Trade Delegation to the People's Republic of China. A decade after he started out, his plan began to pay off. By 1992, Hsu had created his first joint venture in China, Sino-American Zhang Jiagang Hsu's Ginseng Enterprises Inc. In 1993, he signed another contract to establish a joint venture to ship 20,000 pounds of ginseng , worth $700,000 to $800,000 a year, to Ningbo, a city south of Shanghai. Hsu's raw ginseng is processed, graded, and packaged in Ningbo by the joint venture - called Sino-American Hsu's Ginseng Enterprises Inc. By 1994, a third venture was underway - Puning Sino-American Hsu's Ginseng Enterprises, in Puning, Guang- dong.
Hsu attributes his success to his persistence, not his native language abilities. "You have to develop trust and build relationships with any customers overseas. You have to establish common bonds and understand their cultures." Hsu also has a bachelor's degree in sociology from the University of Taiwan and believes this background has helped him in his ability to form interpersonal relations with different types of people.
Hsu is obviously doing something right. Today, Hsu's Ginseng Enterprises is enjoying a 30% growth in annual sales. Last year, the 200-employee company had revenues of more than $18 million, more than half of which came from Hong Kong, Taiwan, Singapore, Malaysia, and China.
"Small- and medium-size companies, like mine, have maneuverability, persistence, and creative vision, but, unfortunately, they don't have the capital or the people power that big companies have," says Hsu. "It's important for them, however, to not let these factors hold them back by not experimenting with overseas markets. In order to grow, a firm must expand its product lines and markets. And a great way to do this is by pursuing customers overseas."
All businesses are facing global competition, Hsu notes.
"Companies that fail to see the world as a global marketplace risk being blindsided at home and abroad."
- BY : Anna Brady Bristol Voss
- SOURCE : Journal of Business Strategy1995.03.01
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