The edge has become the core.
That’s the central idea presented by Anil Gupta and Haiyan Wang in their new book – Getting China and India Right: Strategies for Leveraging the World’s Fastest Growing Economies for Global Advantage.
It’s not enough to merely be present in India and China, argue the authors.
Their thesis: “…any Fortune 1000 company that is not busy figuring out how to leverage the rise of China and India to transform the entire company runs a serious risk of not being around as an independent entity within ten to fifteen years…”
China and India are different from all other countries in that they present four “stories” or opportunities rolled into one:
1) Mega Markets: they provide growth opportunities for every product and service
2) Cost Efficiency Platforms: with low wage rates, they can help reduce your global cost structure
3) Innovation Platforms: the talent pool of engineers and scientists can boost your firm’s technical and innovation capabilities
4) Launching Pads for New Global Competitors: your next global competitors are likely to emerge from here
So what are you supposed to do?
The book guides you, chapter by chapter, to explore the following imperatives:
1) Compete in India and China simultaneously. Why? Four reasons: i) the growth trajectory for both countries places them as the world’s top 4 and 5 markets for every product and service imaginable; ii) India and China offer (for the time being) complementary strengths in services and manufacturing respectively; iii) there are also remarkable similarities which help your company transfer learning from China to India and vice-versa, accelerating your success in both countries; and finally, iv) an integrated China and India strategy helps you reduce your political, economic, and intellectual property risks inherent in operating in just India or China.
2) Compete for mega market dominance through micro-customers. The authors show you how to compete at the top, middle and bottom of the pyramid in India and China. What I found especially interesting was the authors’ insistence that innovation opportunities abound at the bottom of the pyramid and that companies should use this segment as a “learning laboratory” for the discovery of new business models!
3) Leverage China and India for global dominance. There are three opportunities: cost arbitrage, intellectual arbitrage, and business model innovation – each of which can help you build a global platform for competitive advantage.
4) Compete with the locals – the dragons and tigers. The authors show you how to defend yourself and compete against the emerging titans in India and China using three key strategic initiatives: i) attack these emerging titans on their own turf; ii) neutralize their supply-chain advantages by tapping into the cost effective and innovation opportunities available in both countries; and iii) pursue an integrated India plus China strategy which, oddly enough, is more difficult for the emerging players in both countries.
5) Compete for local talent. You must project a positive and visible presence in the local media and local academic institutions. You can offer better global career opportunities for employees outside of India and China. Finally, by being sensitive to cultural and social mores, your company can build strong emotional ties to employee families – spouses, and yes, parents! The authors also suggest you hire in second and third tier cities to achieve lower salary scales and reduced turnover rates. (Wuxi is calling!)
6) Rethink what it means to be a global enterprise. The authors give us four areas to rethink – global strategy, innovation, organization, and lastly, our very mindsets. They warn us to stay slightly ahead of the changes in each of these areas, lest we get left behind on the road to global competition.
This is not a light read, but it is an essential one for every manager or leader with global vision. What I haven’t mentioned in this blog post is the detailed case studies and business examples the authors present to make their case.
Ignore the timely warnings and insightful lessons in this book, and chances are we’ll see you on TV asking for a government bailout.
For more info, see Wang’s blog here and this article in the Wall Street Journal>>
The edge has become the core.