Getting China and India Right: A book review by Bob Morris

Posted on: June 25th, 2011 by bobmorris

Getting China and India Right: Strategies for Leveraging the World’s Fastest Growing Economies for Global Advantage
Anil K. Gupta and Haiyan Wang
Jossey-Bass (2009)

How to leverage the world’s fastest-growing economies for global advantage

In my review of Anil Gupta and Haiyan Wang’s previous book, The Quest for Global Dominance, co-authored with Vijay Govindarajan, I explain that they focus on four tasks essential for any company to emerge and stay as the globally dominant player within its industry:

1. “One, people must ensure that their company leads the industry in identifying new marketing opportunities worldwide and in pursuing these opportunities by establishing the necessary presence in all key markets.”

2. “Two, people must work relentlessly to convert global presence into global competitive advantage.”

3. “Three, people must cultivate a global mindset.”

4. “Four, in developing global strategies, people must take full account of the rapid growth of emerging markets, in particular the rise of China and India.”

In their latest book, Gupta and Wang note that, “Starkly put, China and India are changing the rules of the game” and many of the changes that have occurred in recent years are especially significant. The tasks are still important. However, with reference to the title of this book, Gupta and Wang point out that “being present in China and India [completing various tasks, however worthy they may be] is not the same as getting China and India right.” What to do and how to do it must be determined by different perspectives that are, in fact, the focus of this book.

Hence the importance of fully understanding that only these two countries in the world “simultaneously constitute four stories rolled into one, each of them with the potential to be game changing in its own right.” The authors’ use of the word “game” in Chapter 1 is apt because it denotes players, opponents, and field(s) of competition, rules, officials, and scores. The word also connotes relevant mental and physical skills, practice, preparation, and engagement with opponents. Given these meanings and implications of “game,” now consider the stories “rolled into one,” any one of which could be a game changer, if viewed from these perspectives: “(1) China and India as megamarkets for almost every product and service, (2)…as platforms to dramatic reduce a company’s global cost structure, (3)…as platforms to significantly boost a company’s global technology and innovation base, and (4)…as the springboards for the emergence of a new breed of fearsome global competitors.” Gupta and Haiyan Wang explain why building robust strategies for both countries requires that the company doing so address each of the four “stories” head-on.”

Then in the next four chapters, Gupta and Wang explain the mindset needed to think of both China and India (not of one or the other) as “cousins,” not “twins” (“Chindia”); to think in terms of megamarkets and microcustomers to dominate the competition; to think of leveraging both China and India for global advantage; and think of what competition with “dragons” and “tigers” requires on the global stage. When examining each mindset, the authors cite real-world examples of companies that have developed and then been guided and informed by it. For example, Haier (home appliances), Huawei (telecommunications equipment), and Lenovo (PCs) have a significant presence in India; Bharat Forge (auto components), Suzlon (wind tunnels), and Tata Consulting and Infosys (IT services) have a significant presence in China.

Readers will also appreciate how carefully Gupta and Wang organize and then present their material, especially their core concepts and key insights. In Chapter 4, for example, when explaining how to leverage both China and India for global advantage, they suggest that there are “three primary dimensions along which China and India are becoming central to global competitive advantage for a rapidly growing number of companies across a wide range of industries: cost arbitrage, talent arbitrage, and innovation. Each of the three sources of competitive advantage can be hugely important on its own. [That is also true of China and India.] However, if they can be leveraged in tandem, the impact can be especially powerful.”

They then create a statistical context, a frame-of-reference, for seven specific recommendations for making decisions and taking actions along several fronts (on Pages 107-108) when leveraging China and India as hubs for global advantage. They cite Eli Lilly & Co. and Portal Player as exemplary U.S. companies and explain why. Later in the chapter, they pose a critically important question: What is the optimal mix of global and local for a particular global hub? They then provide a set of five universal guidelines (on Pages 120-121) “that can be used to frame the analysis and discussions that lead to deriving the appropriate answer.”

Reading (and preferably re-reading) this book as well as others and also consulting several sources (such as the China India Institute) will help them to develop a global mindset but only if their cognitive lenses are focused on the future, not on the past. There are also several steps that a company’s decision-makers must take. Anil Gupta and Haiyan Wang suggest four near the conclusion of the final chapter, then share these observations about the successful global corporation of tomorrow: “Organizationally, it will be managed as a globally integrated enterprise rather than as a federation of regional or national fiefdoms. And it will be led by business leaders who have global mindsets and are masters at building bridges rather than moats.”

I highly recommend this book to senior-level executives in companies that are already competing in the global marketplace or are now planning to do so. I also recommend it to senior-level executives in other companies that are within the supply chains of current and imminent global players.

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