The Hindu Business Line : Business in the world arena

If you are a company drawing up strategies for India and China, don’t forget to do three things: capture the growing market opportunities in these countries, proactively leverage their human resources to transform your global operations, and think of these two destinations as core to your global strategies and your permanent homes.

Thus advise Anil K. Gupta, Vijay Govindarajan and Haiyan Wang in The Quest for Global Dominance, second edition ( www.wileyindia.com). Think China and India, not China or India, they state and present three reasons to argue why. “First, for many industries, both China and India present some of the highest growth rates in the world and are emerging as mega-markets.” For example, for Nokia, China and India are the first and second largest markets.

“Second, China and India offer complementary strengths that can be leveraged in a synergistic manner.” IBM, for instance, relies on China as ‘primary procurement source to support the hardware business,’ and India, as ‘one of the most important global hubs for the delivery of IT services to clients worldwide.’

The third reason that the authors put forth is the potential to ‘reduce risks of intellectual-property leakage by disaggregating and distributing core R&D and core competent production across China and India as well as other countries.’

In this context, the book cites a telling case of a European manufacturer that sells machinery to construction contractors. “Burned by the experience of seeing its former Chinese partner produce copycat versions of an earlier model, this company is now planning to consolidate the production of some subsystems in India and other subsystems in China, while keeping assembly operations localised within each country.” Among the new chapters in the current edition is one on globalising the young venture.

D. Murali

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