Global Strategies for Emerging Asia E-Book

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 450

Veröffentlichungsjahr: 2012

Beschreibung

The multinational corporate guide for thriving in the Asian marketplace Led by China and India, the rise of emerging Asia is transforming the structure of the global economy. By 2025, if not sooner, China will almost certainly overtake the U.S. to become the world's largest economy. By then, India is likely to have overtaken Japan to become the world's third largest economy, after China and the U.S. Besides China and India, Asia also includes other fast-growing economies such as Indonesia, Malaysia, Philippines, Thailand, and Vietnam. Added together, by 2025, these developments are likely to make Asia's economy larger than those of the U.S. and Europe combined. It is clear that, for every large company, leadership in Asia is rapidly becoming critical for leadership globally. This important resource brings together the latest ideas and in-depth case analyses from leading academics and practitioners to provide a comprehensive guide to succeeding in Asia. * Explores how to develop a strategy to benefit from new patterns of 21st century trade * Explains how companies can fight and win against low-cost competition from Asian companies * Shows how to transfer homegrown management practices to Asia * Reveals how to safeguard the company's intellectual property in China * Brings to light how to leverage India as a platform to revitalize the company's innovation capabilities A resource for competing in today's international market, this book offers executives and managers a guide for navigating the new global reality--that of Asia as the world's emerging center of gravity.

Leseprobe

Table of Contents

Cover

Series page

Title page

Copyright page

Dedication

Preface

Acknowledgments

Part One: GEARING UP FOR THE NEW GLOBAL REALITY

1 BUILDING THE NEXT-GENERATION GLOBAL ENTERPRISE

Rethinking Global Strategy

Rethinking Global Innovation

Rethinking Global Organization

Globalizing the Corporate Mind-Set

2 IS YOUR BUSINESS MODEL READY TO DRILL INTO THE CORE OF THE DIAMOND?

Domestic Consumption

EM2EM Trade

Implications for Marketing Programs of MNCS in Emerging Markets

Outlines of a New Business Model

Conclusion

Part Two: WINNING THE LOCAL COMPETITION IN EMERGING ASIA

3 COEVOLVING LOCAL ADAPTATION AND GLOBAL INTEGRATION

Meeting the Challenge of Local Adaptation Versus Global Integration in Emerging Markets

Coevolution Perspective

Panasonic in China

Conclusion

4 HOW SOME JAPANESE FIRMS HAVE SUCCEEDED AGAINST LOW-COST COMPETITORS IN EMERGING MARKETS

Tapping Emerging Markets

Analytical Perspectives of Emerging Market Strategy

Honda’s Success Against Low-Cost Competitors in the ASEAN Motorcycle Market

Conclusion

5 TRANSFERRING HOME-GROWN MANAGEMENT PRACTICES

China’s Automobile Industry

Toyota’s Strategy Toward China

The Transfer of Supplier Management in TAG: Phase I (1990s)

The Transfer of Supplier Management in TAG: Phase II (2000s)

Conclusion

Part Three: ACQUISITION-DRIVEN GLOBALIZATION FROM EMERGING ASIA

6 DUBIOUS VALUE OF INTERNATIONAL ACQUISITIONS BY EMERGING ECONOMY FIRMS

Stock Market Returns

Financing Acquisitions

Case Studies

Analysis

Formula for Success

Conclusion

7 ACQUISITION ADVANTAGE

The Rise of Global Cross-Border Acquisitions by Emerging Economy Firms

Why Do Emerging Economy Companies Make Cross-Border Acquisitions?

Implications of Growing Cross-Border Acquisitions by Emerging Economy Companies

Emerging Economy Acquirers: Four Case Studies

Implications for Developed Country Multinational Companies

Part Four: INNOVATION OPPORTUNITIES AND CHALLENGES IN EMERGING ASIA

8 INNOVATING IN THE VORTEX

Shifting Perspective

A Pattern for Innovation

Underlying Factors of Business Experience

Corporate Leadership Guidance

The Setting: Establishing the Potential Field of Innovation

The Play: Manifesting the New and Getting to Revitalizing Outcomes

Insights and Recommendations

9 PROTECTING INTELLECTUAL PROPERTY IN CHINA

The Chinese IP Protection Challenge

What Works in China?

Conclusion

10 COMPETING IN EMERGING ASIA

Theme 1: Reconceptualizing Strategy

Theme 2: Rethinking Innovation

Theme 3: Reinventing the Global Organization

Theme 4: Globalizing Through Alliances and Acquisitions

Theme 5: Fostering a Global Mind-Set

About the Editors and Contributors

The Editors

The Contributors

Index

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Cover images by Thinkstock

Library of Congress Cataloging-in-Publication Data

Global strategies for emerging Asia / Anil K. Gupta, Toshiro Wakayama, U. Srinivasa Rangan, editors. – 1st ed

p. cm.

 Includes bibliographical references and index.

 ISBN 978-1-118-21797-9 (hardback); ISBN 978-1-118-28235-9 (ebk.); ISBN 978-1-118-28322-6 (ebk.); ISBN 978-1-118-28440-7 (ebk.)

 1. Asia–Commerce. 2. International business enterprises–Asia. 3. Asia–Foreign economic relations. 4. Asia–Economic policy–21st century. 5. Asia–Economic conditions–21st century. I. Gupta, Anil K. II. Wakayama, Toshiro. III. Rangan, U. Srinivasa.

 HF3752.3.G55 2012

 337.5–dc23

2012008075

Dedicated to our children—the creators and shapers of the future:

Anjali, Meili, and Rahul Gupta

Naomi Wakayama

Raghu and Sridhar Rangan

Preface

The idea for this book originated at Leveraging Megatrends for Global Advantage: Delivering High Impact Executive Insights Grounded in Academic Rigor, a conference held in Tokyo in December 2010 and organized by the Center for Global Communications (Glocom), International University of Japan. A central theme of the conference was that the rise of emerging markets is changing the structure of the global economy more profoundly and more rapidly than at any other time in human history. Within this broader phenomenon, the rise of emerging Asia forms the center of gravity of the structural changes under way.

The conference was aimed at both managers and scholars. The intent was to open a dialogue between senior managers wrestling with immense global business challenges on the ground and academics trying to make sense of them. Given the high quality of the papers presented at this conference and the high quality of the discussions they generated, we concluded that some of the papers could constitute a wonderful book targeted at managers and business students. This book is the product of significant further work by the selected authors toward making each chapter not only richer (with more detail and deeper analysis) but also easier to read.

The book consists of nine focused chapters, each addressing a central question, plus a concluding chapter that pulls together and summarizes the central ideas emerging from the nine chapters as a set.

In Chapter One, Anil Gupta and Haiyan Wang argue that given the size and growth rates of emerging economies, ignoring or even giving peripheral treatment to these markets is no longer a viable option for most companies. They do so at grave peril to their own future. Rooted in this premise, the authors discuss how the changing structure and dynamics of the global economy will determine the characteristics of the global enterprises that emerge as the new winners or survivors ten years from now. The four building blocks of their analysis are the need to rethink global strategy, the need to rethink global innovation, the need to rethink global organization, and the need to keep globalizing the corporate mind-set.

In Chapter Two, Niraj Dawar and Charan Bagga start by highlighting two broad trends in today’s global economy: domestic consumption in the emerging economies is gathering steam, and trade between emerging markets is ready to boom. Building on this observation, they ask: Can the conventional business model serve the new consumers in emerging markets? If not, what needs to change? They go on to examine the implications of these two trends and set out an agenda to prepare multinational corporations for the new world trade order.

In Chapter Three, Toshiro Wakayama, Junjiro Shintaku, Tomofumi Amano, and Takafumi Kikuchi present a detailed analysis of Panasonic’s evolutionary history in China. They note that in its nearly twenty-five years of presence in China, Panasonic has gradually developed local capabilities through multiple phases, having increasingly addressed deeper localization enabled by more extensive cross-border integration of its home-grown resources and capabilities. Based on this analysis, they conclude that the best way to manage the apparent tension between the need for local adaptation and that for global integration is to view the two as synergistic rather than antagonistic. Deeper localization invites greater global integration, which in turn enables yet deeper localization.

In Chapter Four, Junjiro Shintaku and Tomofumi Amano examine how developed country multinationals can successfully compete against low-cost competitors in emerging markets. Starting with a number of examples that illustrate what they term the “emerging market dilemma,” Shintaku and Amano present a detailed analysis of how Honda took on and beat low-cost competitors from China in the Vietnamese motor­cycle market. One of their important conclusions is that, in emerging markets, cutting prices regardless of other considerations is not always a good idea. Reducing prices without trying to understand the market is unlikely to lead to long-term success. Customers gradually learn about the products and the technologies, and their buying behavior follows not only their budget but also their level of product knowledge.

In Chapter Five, Akira Tanaka and Yue Wang present a longitudinal case study of the joint venture between Toyota Motor Company and Tianjin Automotive Group in China, with a particular focus on how Toyota transferred its supply chain practices to the joint venture. They demonstrate that China’s macroinstitutional environment provides important insights into the differences between the Chinese and Japanese parts supply practices and the problems that Japanese firms faced during the transfer of their supplier management practices to China. They also assess the Toyota way of resolving these difficulties in China’s unique institutional environment and offer advice to multinationals on how to manage the transfer of their home-grown management practices to their China operations.

In Chapter Six, Aneel Karnani looks at the case of companies from emerging Asia that are spreading their wings abroad. He notes that megadeals involving acquisitions by emerging economy firms (such as Tata Steel buying Corus, Tata Motors buying Jaguar Land Rover, and Lenovo buying IBM’s PC business) have attracted much adulatory attention from the business press. Instead of getting caught up in the rhetoric, Karnani pre­sents an empirical analysis of the stock market performance of all large foreign acquisitions by Indian companies from 2000 to 2009. He also analyzes the three largest acquisitions using a case study approach and concludes that foreign acquisitions from India have not created shareholder value. The causes of this underperformance are too little integration, agency problems, and easy capital. A successful approach to foreign acquisitions will require significant synergies, reasonable price, and deep integration.

In Chapter Seven, Srinivasa Rangan and Sam Hariharan also analyze the emergence of aspiring global champions from China and India. They outline the various conceptual frameworks that might explain why there has been a quantum jump in acquisitions by Chinese and Indian firms. Using aggregate and anecdotal data, they show that the current growth in acquisitions abroad marks a significant departure in the behavior of Chinese and Indian firms. Building on this conclusion and using a series of case studies, they look at how Chinese and Indian firms’ global acquisitions pose a strategic challenge to established developed country multinationals. They conclude by offering suggestions on how multinationals from Europe, Japan, and the United States might address the strategic challenge that Chinese and Indian firms pose.

In Chapter Eight, Srikanth Kannapan and Kuruvilla Lukose look at India as a platform for innovation. They examine three companies in detail: the Indian operations of IBM, the technology giant; Sasken, a publicly listed Indian company in the software and services sector employing thirty-five hundred people spread across India, Europe, and the United States; and Strand Lifesciences, a privately held computational life sciences organization headquartered in Bangalore. They conclude that companies must now learn what they refer to as “vortex leadership”—a new leadership practice for recognizing and realizing business opportunities in emerging economies like India. Leaders need to learn how to exploit new vistas that get uncovered as in a kaleidoscope, with small patches of light transforming to something much larger with a turn. They need to be able to see opportunity in complexity and transcend apparent opposites of agility and patience. Finally, leaders need to be at ease at combining an unhurried sociocultural sensitivity with the urgency demanded by business pragmatism.

In Chapter Nine, Andreas Schotter and Mary Teagarden focus on theft of intellectual property (IP), a widely recognized challenge, especially for companies operating in China. Intellectual property theft in China is a much bigger problem than simply knockoffs of Gucci purses, North Face jackets, or Rolex watches. The challenge ranges from copying toys and luxury goods to copying automotive and aircraft parts, pharmaceuticals, and other cutting-edge high-tech products like medical X-ray machines. It also includes copying business processes and even business or service models. They start their analysis with why there is such widespread IP theft in China. Based on a study of what companies are doing to combat this challenge, they then offer a set of best practices that a company can deploy to minimize the risk of IP theft.

In Chapter Ten, the editors of this book reflect on the totality of the advice that all nine chapters collectively offer to multinationals about how to compete in emerging Asia. In this conclusion, we reinforce the validity and relevance of the overall framework proposed by Gupta and Wang in Chapter One: the imperative to rethink global strategy, global innovation, and global organization and, above all, the need to keep globalizing the corporate mind-set.

We hope that you will find this book interesting to read and useful. Since no book can ever be the last word on anything, we also invite you to share your feedback and your own experiences with us. The book’s Web site is www.globalstrategiesforemergingasia.com.

Anil K. GuptaUniversity of Maryland and [email protected]

Toshiro WakayamaInternational University of [email protected]

U. Srinivasa RanganBabson [email protected]

Acknowledgments

The idea for this book originated at Leveraging Megatrends for Global Advantage, a conference held in Tokyo on December 16–17, 2010, and organized by the Center for Global Communications (Glocom), International University of Japan. We, the editors of this book, are indebted to Akira Miyahara, director of Glocom, and the staff at the center for their support and encouragement for holding this conference and for support toward the development of this book. We are also grateful to Ji Soo Kim at KAIST Business School and Steven White at Tsinghua University for their tireless efforts in co-organizing the conference. We thank the following corporations for their generous sponsorship of the conference:

DAIKIN INDUSTRIES, LTD.

Fuji Xerox Co., Ltd.

Hitachi, Ltd.

Honda Motor Co., Ltd.

Kikkoman Corporation

Nippon Express Co., Ltd.

NIPPON TELEGRAPH AND TELEPHONE CORPORATION

ORIX Corporation

Panasonic Corporation

SAMSUNG JAPAN CORPORATION

Yokogawa Electric Corporation

Anil Gupta would also like to acknowledge his deep ap­preciation for the ongoing collaboration and support offered by Jossey-Bass/Wiley and Kathe Sweeney, its executive editor. This is Anil’s sixth book with Jossey-Bass and John Wiley & Sons (and the third book during Kathe’s role as executive editor). Many thanks, Kathe, for your ongoing friendship and support. Many thanks also to Dani Scoville, editorial program coordinator at Jossey-Bass, for your wonderful support in all aspects of this book’s production.

Finally, Srinivasa Rangan would like to acknowledge the support of Babson College while working on this book. In particular, he is most appreciative of the support and encouragement received over the years from Len Schlesinger, college president; Shahid Ansari, provost; Deans Fritz Fleischmann, Carolyn Hotchkiss, and Raghu Tadepalli; Management Division chairs Bill Nemitz, Ashok Rao, James Hunt, Keith Rollag, and Nan Langowitz; and his colleagues, especially Stephen Allen, Allan Cohen, and Sam Hariharan. He is also grateful to Andronico Luksic, who funded his endowed chair professorship, which allowed him to devote time to work on this book. He is deeply appreciative of the support and help of his wife, Sudha, while he was immersed in working on this book.

Part One GEARING UP FOR THE NEW GLOBAL REALITY

1

BUILDING THE NEXT-GENERATION GLOBAL ENTERPRISE

Anil K. Gupta, Haiyan Wang

The rise of emerging markets, with emerging Asia at the center of them all, is rapidly changing the structure of the global economy. Many of the emerging markets are no longer small. They already constitute nine of the world’s twenty-four largest (and four of the twelve largest) economies (see Table 1.1). Within the next ten to fifteen years, emerging markets will account for half of the world’s gross domestic product, up from about a third today and less than 10 percent in 1980. Emerging markets are also becoming the launching pads for a new generation of global competitors. According to Fortune magazine, of the world’s five hundred largest corporations by revenue, sixty-seven are now headquartered in the BRIC (Brazil, Russia, India, and China) countries, up from just seven in 1995. Given the likely growth rates of emerging economies (three times that of the developed ones), it is all but certain that the shift in the world’s economic center of gravity will accelerate over the coming decade. For most companies, ignoring or even giving peripheral treatment to emerging markets is no longer a viable option. They do so at grave peril to their own future.

Table 1.1 The World’s Twenty-Four Largest Economies in 2010

Source: World Bank.

Rank

Country

2010 GDP (US$ billion)

 1

United States

14,582

 2

China

a

5,879

 3

Japan

5,498

 4

Germany

3,310

 5

France

2,560

 6

United Kingdom

2,246

 7

Brazil

a

2,088

 8

Italy

2,051

 9

India

a

1,729

10

Canada

1,574

11

Russia

a

1,480

12

Spain

1,407

13

Mexico

a

1,040

14

South Korea

1,014

15

Australia

925

16

Netherlands

783

17

Turkey

a

735

18

Indonesia

a

707

19

Switzerland

524

20

Poland

a

469

21

Belgium

467

22

Sweden

458

23

Norway

414

24

Venezuela

a

388

Note: All data at market exchange rates. These twenty-four economies comprise 62 percent of the world’s population and 83 percent of the world’s GDP in 2010.

aDenotes an emerging economy (defined as any economy categorized by the World Bank as either middle income or low income).

As evolutionary theory tells us, when the environment changes, one must adapt—or die! Rooted in that premise, in this chapter, we look at how the changing structure and dynamics of the global economy will determine the characteristics of the global enterprises that emerge as the new winners or the survivors ten years from now.