GETTING CHINA AND INDIA RIGHT – Strategies for Leveraging the World’s Fastest Growing Economies For Global Advantage
There’re only two places to turn for companies seeking growth during today’s global financial crisis: China and India, which despite the recent slowdown, are still the world’s fastest growing economies. But while many companies are expanding in China and India, few are getting it right. Most have missed the growth opportunities while thinking only of offshoring and cost reduction. They tap the wealthy urban market but don’t know how to profit from the masses outside the rich cities. And few heed the acute threat of new global players from within China and India including Lenovo, Chery Automobile, Haier, Infosys, Tata, and Mahindra.
In GETTING CHINA AND INDIA RIGHT : Strategies for Leveraging the World’s Fastest Growing Economies For Global Advantage (Jossey-Bass; February 23; $29.95) Anil K. Gupta & Haiyan Wang tell the stories of the rare global companies that have gotten it right in both countries by changing their mindsets, adapting their organizations and reinventing everything from their global strategies to their innovation sources. They interviewed managers in over 100 companies to find China/India strategies that are succeeding at winning global dominance including:
Labor market branding –To win the world’s largest war for talent (globalizing Chinese companies alone will need 70,000 additional senior managers by 2015-2020) Accenture advertises in movie theaters and coffee houses and Intel partners with local universities to add courses and buy textbooks for students.
Innovation: GE’s largest R&D center outside the U.S. is in Bangalore and Microsoft’s is in Beijing. GE is aiming for $8-10 billion in revenue from India by 2010. Apple leveraged the innovation strengths of China and India for its iPod, whose microprocessor was developed by engineers in Hyderabad and Silicon Valley, whose chip was manufactured in Taiwan, and which was assembled in China.
A multisegment market strategy: Adidas in China has one type of store that emphasizes local designs tailored to Asian bodies and tastes and another type carrying global designs.
Partnerning with China and India: Cisco provides training to the Chinese so it can transfer some of its global business process services to China in a few years.
Leveraging the complementary strengths of both China and India: IBM relies on China for hardware procurement but has made India the global center of IT services.
Innovation: GE’s largest R&D center outside the U.S. is in Bangalore and Microsoft’s is in Beijing. GE is aiming for $8-10 billion in revenue from India by 2010.
Cost reduction: In five years, Accenture added 30,000 employees in India for $1 billion less than it would cost to hire western employees. Indian employees are now over 20 percent of the company’s entire global staff.
Competing with emerging global players from within: Cisco faces a formidable threat from China’s Huawei, whose low cost structure may help propel it to become India’s number one supplier of telecom infrastructure equipment and perhaps even the world’s.
Many of today’s Western giants that don’t have solid China-and-India strategies will face severe threats to their very existence in as little as ten years’ time, as competitors who are making the most of China and India mark these companies with a bull’s eye for annihilation or acquisition.
If companies just skim the surface, they might be setting themselves up for being pushed aside as new global players emerge from within.
The key to global dominance is getting China and India right and Gupta and Wang show the way in a book that Jeffrey Garten says “no global CEO…can afford not to read.”