Anil K. Gupta Haiyan Wang
 
   
 

Buy the Book:

Amazon Barnes & Noble
Borders Books.A.Million
800.CEO
 


IDEAS

 

 
Four Stories Rolled Into One
 
Think China and India, Not China or India
 
Megamarkets and Microcustomers
 
Leveraging China and India for Global Advantage
 
Competing with Dragons and Tigers on the Global Stage
 
The War for Talent: Dealing with Scarcity in the Midst of Plenty
 
Global Enterprise 2020

 

 

Endorsements and Reviews

Synopsis

Table of Contents

Q&A

Chapter-1

China and India: Four Stories Rolled Into One

The first decade of the twenty-first century will go down as representing a strategic inflection point in the global economic landscape. For the first time in almost two hundred years, it is in this decade that, in terms of gross domestic product, the emerging economies will catch up with and race ahead of the developed ones – a trend that is likely to get added impetus by the financial crisis presently engulfing many of the world’s economies. China and India, the biggest contributors to world economic growth, are the flag bearers of this transformation.

Starkly put, China and India are changing the rules of the global game. They are two of the world’s ten largest and the two fastest growing economies. Thus, they account for the two biggest growth opportunities for almost every product or service, be it candy, cars, or computers. They are two of the world’s poorest economies in terms of per capita income. Thus, they offer some of the lowest wage rates for both blue and white collar work, wage rates that can have a transformational effect on competitive advantage. They are the world’s two largest producers of science and engineering graduates. Thus, they present an opportunity to radically expand a company’s intellectual capabilities without a proportionate increase in cost structure. Last but not least, they are the breeding grounds for a new cohort of ambitious, aggressive, and fast-moving global champions. Thus, they also represent a competitive threat to established multinationals that is potentially far more severe than was ever the case from Toyota, Sony, Samsung, or LG.

The central thesis of this book is that 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 from now. If you doubt the validity of this thesis, just look at how the structure of even the most basic and relatively low-tech industries has changed over the last twenty years. In 1987, Mittal Steel was just a tiny steel producer in Indonesia. Today, as ArcelorMittal, it is the world’s largest steel behemoth, bigger than the next three players combined. In 1987, Cemex was a mid-sized cement producer in Mexico. Today, it is one of the three largest building materials companies in the world. In 1987, South African Breweries was a domestic beer company confined to its homeland due to the anti-apartheid sanctions imposed by the rest of the world. Today, it is one of the world’s three largest beer companies. Look ahead now and factor in the sheer size and growth rates of China and India, the globalization of capital markets, and the rapid diffusion of technology. There can be little doubt that, over the next ten years, the magnitude and pace of change in every industry will be bigger and faster than over the last twenty.

As the history of most industries tells us, strategic inflection points are particularly dangerous times for incumbent firms. Just look at the survival rates of incumbents in the computing industry after the shift from mainframes to minicomputers, from minicomputers to PCs, and from isolated PCs to the Internet. Such turning points require non-linear transformations in core beliefs and core business models. A small number of established players - IBM under Lou Gerstner and Sam Palmisano and Apple under Steve Jobs - are able to engineer the needed transformation and come out fitter and stronger. These companies have cultures that thrive on change and are lucky to have leaders with a propensity to look at today from the lens of tomorrow. Most companies, however, deal with strategic inflection points by getting trapped in a vicious cycle. Their leaders look at tomorrow from the lens of today. Thus, they are either blind to the change or see it as a peripheral phenomenon. By the time they wake up, it is too late. Look at the case of Digital Equipment, the world’s second largest computer company in the late 1970s. In 1977, Digital’s founder and CEO Ken Olsen observed that "There is no reason for any individuals to have a computer in their home." By 1998, Digital Equipment had vanished, acquired by PC-maker Compaq.

Given the transformational impact of China and India, the world economy and thus every industry in it is at a similar strategic inflection point today. The leaders of every large company must choose, by design or by default, between two clear options: Do we want to be like Nokia which has vowed to dominate not just every corner of the rich markets such as London and Manhattan but also every corner of the poorest markets such as the villages of Xinjiang province in China and Uttar Pradesh in India? Or, do we want to be like Motorola whose former CEO had declared that one of the lynchpins of his strategy to save the company was to deemphasize the “low margin” emerging markets? Do we want to be like Accenture which decided to grab the tiger by the tail and grow its India-based global delivery capabilities from 500 people in 2002 to over 35,000 people in 2007? Or, do we want to be like Bearing Point whose former CEO stated publicly in 2005 that “we do not plan to engage in [a] rapid expansion” of the company’s delivery capabilities in China and India? If you belong in the first category of leaders, we invite you to read on. However, if you doubt our central thesis, we wish you the best of luck and hope that we will have the opportunity to compare notes in 2020.

The goal of this book is to provide business leaders with a strategic roadmap for capturing the growth, efficiency, talent, and innovation opportunities offered by China and India. We discuss how a company can leverage its global capabilities to discover, create, and win the market opportunities there. We examine how a company can leverage the talent and innovation opportunities from within these two countries to transform itself globally. And, we look at how a company can effectively battle with the emerging dragons and tigers from these new epicenters of the world economy.

In this first chapter, we begin the journey by looking at the factors that are driving the re-emergence of China and India; outlining the four game-changing realities that define the strategic importance of today’s China and today’s India; uncovering the challenges that make it extremely hard for many companies to deal with the new global reality; and laying out the tasks that await business leaders who want to drive the change rather than be blindsided over the next ten years.

 

 

Chapter-2

Chapter-3

Chapter-4

Chapter-5

Chapter-6

Chapter-7

Anil K. Gupta

     The Institute

 

        

 

COPYRIGHT © 2008 China India Institute. All rights reserved |Site by Karma Strategies