Customer Reviews

Getting China and India Right: Strategies for Leveraging the World's Fastest Growing Economies for Global Advantage

5 star:		(15)
4 star:		(2)
3 star:		(0)
2 star:		(0)
1 star:		(0)

 

 

Getting China and India Right is an authoritative and research-driven book essential to executives in global corporations, business academics and economists. Dr. Gupta and Ms. Wang have integrated vast amounts of quantitative and qualitative research to provide a valuable (and unique) perspective to anyone currently doing business or aspiring to win on the global playing field -- which should be ANY company with global or multinational presence. I have already referred the book to several clients and CXOs wrestling with the complexity of leveraging the capabilities of these countries and tapping into the mega-markets represented by their populations. The response I have received has been only positive.

The book is organized in a logical manner which allows readers to take individual chapters of interest and dig right in or take a comprehensive perspective reading through front to back. Loaded with rich data, case studies and interview findings, Getting China and India Right shakes some myths many executives I have worked with have long held (e.g. its either China OR India, or its only about cost-saving). It compels executives to reexamine their current approaches and mental models about global competition much like Porter did with Competitive Strategy or Competitive Advantage of Nations. So, while it certainly shakes executives who are not "Getting it Right" but does not leave them paralyzed with just high level, inactionable concepts. It provides highly tangible strategic recommendations along with specific approaches to building the capabilities needed to win and detailed questions organizations need to answer.

Our firm has utilized many of Dr Gupta's recommendations and approaches in supporting clients wrestling with these difficult issues. Many other books on China or India gloss over the complexity of each country or inherent strategic challenges, leaving readers with no clear perspectives on what they can specifically do to realign strategies. Other books also tackle each country as an individual case when in fact, as Gupta and Wang clearly demonstrate, one must look at BOTH countries on an integrated basis as part of a global network of strategic capabilities. This insight in and of itself makes this a MUST READ as it changes everything in how companies view the competitive opportunity/threat. Other insights on how to sell into these mega markets, win talent wars, or compete against domestic companies further arm companies to win.

The book was an easy read, written in a direct, authoritative and user-friendly manner. This likely stems from both Dr Gupta and Ms Wang's style (I have seen them speak to large organizations) and they are excellent speakers, approachable, confident and engaging. High marks to Getting China and India Right as these countries are the critical battlegrounds for the next 20 years and Gupta/Wang provide executives essential firepower to win.

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 must be determined by different perspectives and they are 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, f or 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." Once again, Gupta and Wang include another real-world example: specifically, a mini-case study of Accenture's development of global delivery capabilities in India, led by Keith Haviland (a British citizen) under the supervision of Karl Heinz Floether (a German executive). Haviland and his associates succeeded. How? There were many key decisions and actions that helped ensure a successful ramp-up. Seven are briefly discussed on Pages 122-123. Once again, Gupta and Wang not only identify "what," they also explain "how" and "why."

In the final chapter, they note that the term "mindset" refers to cognitive lenses through which people make sense of the world around them. They cite four examples of "looking at the future from the lens of the past" such as Thomas Watson, Sr.'s speculation in 1943, "I think there is a world market for maybe five computers." Why do most companies (in 2009) lack global mindsets? Gupta and Wang suggest that their leaders "with the power to shape the company's future direction are far removed psychologically, cognitively, and physically from the new epicenters of global change." 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.

A good book has the potential to become a great book when the law of unintended consequences takes over. Getting China and India Right is one such example. The writers strong observational skill provides real nuggets such as Frugal Innnovation, Employee Retention Bonds and Deffered compensation and How to be successful by thinking micro such as insuring a cow. All of these strategies which are standard in China and India suddenly are now relevant to the US and Western economies as we search for ways to restart our economies.

The business case histories that have been presented are compelling and lay out a road map for other business executives to follow. While in the US companies are in retreat; witness the flight of capital out of India back to the US this is precisely the time that a book like this one should be a must read for Wall Street executives. The fundamental domestic drivers in India and China are strong and will be key in a global recovery. What is true for the global economy is equally true for individual companies.

One observation that would have helped the average reader. If one is convinced as the recommendations of the book there is always the practical challenge of how to start. Gupta and Wang should publish a paper on the how to. One good way is for US companies to bring in Indian and Chinese expatriates in the US on their Board of Directors. The other is to begin to backward integrate through their supplier relationships. There are other techniques.

Overall a very timely book and a worthy contribution to the subject. It is an easy read but it is not light fare by any means.

Rakesh Kaul

By now there are many books and articles that seek to explain the economic boom in China or India. Many of these books extrapolate from one or few incidents/cases to paint with a broad brush the success of these countries and the impending doom of western businesses. I was looking for a book that offered more well reasoned arguments to understand the puzzle of the China/India boom. I read this book because I was familiar with the author's earlier works. Anil Gupta has published some influential academic articles in strategic management and international business, hence I thought this book would offer some sophisticated analyses. I wasn't disappointed. I felt that Gupta and Wang deliver very compelling stories about the forces that are propelling the China/India economic boom. The book has two parts. The first part focuses on the factors driving China/India growth. The second part expands on the first and suggests strategies that US firms could use to respond to challenges posed by China/India growth.
The China/India growth is interpreted using a neat 4-dimensional framework. These are 1. large local markets, 2. vast talent pools that would allow for local innovation. 3. cost efficiencies. 4. competitive local firms that have over the years become strong enough to take on global competitors. Once these growth stories are explained in the first chapter, the remaining six chapters discuss how (US) firms could respond to these challenges. The book's analysis and recommendations are supported by lots of research evidence: archival data, interviews and cases. It is this strong analysis that makes the book's arguments credible and difficult to refute. The book's insights would be appealing to academics, executives, policy makers and students interested in understanding China and India's growth arc. The book is well written, engaging and hard to put down.

The authors begin by identifying what they believe are some of the most common mistakes of U.S. companies vs. China nd India: 1)Viewing them solely from the perspective of off-shoring and cost reduction, 2)Building marketing strategies centered around just the biggest cities and the top 5-10% of the population, and 3)Underestimating the ambitions and capabilities of emerging competitors. They believe that any medium to large company that does not develop well-thought-out strategies vs. China and India could face severe threats to its existence within the next decade or so.

As recently as 1820, China and India together accounted for almost 50% of the world's GDP; by 1950 it was less than 10%. Now it is rapidly climbing again. They estimate the average hourly labor costs for 2009 are $1.27 in China and $1.68 in India, compared to $25.34 in the U.S. Moreover, Infosys and Wipro (Indian IT firms), though much smaller than Accenture and EDS, are much more profitable, giving them a higher capitalization than one would otherwise suspect. In 2007, for the second time in history, the total deal size of emerging-into-developed economies is estimated to exceed that of developed-into-emerging economies. The emergence of global champions from India and China is taking place at a much faster rate vs. Japan and South Korea, due to India and China's greater acquisition activity. (Another important contributor to China's rapid expansion is its insistence on major foreign vendors participating with local Chinese firms in supplying large orders - eg. G.E. locomotives, Boeing Dreamliners, G.M. etc. automobiles.)

In 2005, the estimated U.S. number of graduate degrees in engineering, technology, and computer science was about 60,000 for the U.S. (half being foreign nationals), vs. 75,000 for China and 60,000 for India.

In 2005 China received $79 billion in foreign direct investment - highest in the world; however, compared to domestic savings of $2+ trillion and foreign exchange reserves of over $1.5 trillion the amount is trivial. (Don't forget that a dollar goes much further in China and India.)

At any of the top five business schools in India, the entire class of graduating MBAs is placed in less than four hours, much less than for Harvard Business School.

In recent years, over 50% of economic growth in the world's GDP came from emerging markets - mostly China and India. In 2007, China added more urban floor space than all developed nations combined; almost half of the world's largest 45,000 dams are in China. The Three Gorges Dam is the world's largest hydroelectric project (22,400 MW, cost $30 billion - expected to be repaid in ten years.) This year China is spending $50 billion on high-speed trains (more than the rest of the world combined), vs. $8 billion in the U.S., spread over three years; top speed for the Chinese trains is 220 mph (150 mph avg.), vs. 150 and 79 mph for the U.S. - ultimately, China plans on 25,000 miles of high-speed track. China's Beijing-Lhasa Express exceeds 16,640 ft. in elevation - world's highest, requiring special engines and oxygen equipment for its cars. China also has the world's fastest train - 270 mph maglev from Shanghai to the airport at 270 mph, opened in 2004.

China and India are becoming competitive in areas beyond applied-IT, construction, and manufacturing. Both nations are seen as good areas for clinical trials of new drugs and therapies (one-tenth the cost in the U.S.), and China has become base for research into new drugs and stem cells. G.E. has large technology research centers in Bangalore and Shanghai, as does IBM (train controls), Intel, Microsoft, and Motorola in Beijing.

Bottom Line: Henry Blodget said it well: China is "not a land of sock and toy factories." Neither is India. China and India present some of the highest growth rates in the world, and are emerging megamarkets. The Chinese economy is predicted to overtake ours by 2025. Our economy has become tired in comparison to the "New Asia" - economists and politicians should also read this book.

Many books have been published in recent times on China and India, especially from the view of these two giants having the potential of becoming huge emerging markets with a large appetite for goods and services of any kind. The view taken so far has been mostly on the following lines to name a few prominent themes:

- Which country is a better bet in the long run for multinationals to invest: The India OR China dilemma.
- Comparison of strengths and weaknesses of these neighbors
- Likely impact on global commodity and other markets when these countries start consuming in huge quantities

This book is a major departure from the above themes. Firstly the authors try and quantify the extent of growth that is likely in China and India in the next three decades. India and China together contributed to nearly half of the world's GDP in 1820. However having missed the Industrial Revolution (by design in China and by foreign rule in India), these Asian giants were gradually relegated to the unfortunate position of being amongst the world's poorest countries. Even after independence in 1947, India, for example remained a closed economy, caught in bureaucratic tentacles. Having liberalized their economies to a large extent and opened their doors to the fresh air of globalization (China in 1979 and India in 1991 and hence the India = China - 12 analogy), the economic theory of convergence seems to be at work at full speed.

While both these markets have a huge potential for consumption, despite rapid growth, their per capita incomes will be significantly lower than the West. This means, these markets need ultra low cost products that are extremely energy efficient and have a very low environmental footprint. There us no way these countries can consume the way the West has done till date. Planet earth cannot simply sustain.

Western multinationals do not get this right, argue the authors. They are good at replicating their products and business models. But this would cover perhaps the top 5 percent of emerging market customers. Even with glocalization, the reach is perhaps another 10 percent. The majority of the markets need products and services that are developed based on ground up innovations. Nokia India for example introduced a $30 mobile phone that is not only affordable but can double up as a torch light for the villagers in the evening. India's Ariel provides countrywide mobile voice services at 1 US cent per minute. It has partnered with companies like IBM for IT infrastructure services and Nokia Siemens Networks for communication equipment. The business model with these partners is to pay them based on actual utilization of their capacity, based on defined service levels. Such innovative business models make it possible to provide low cost services, yet in a very profitable manner. India had 5 million phones in 1991 with a tele density of 0.7 percent (and many of the phones not working). Today it adds 7 million connections per month with a tele-density of 45 percent, with excellent quality of communication at the most competitive price.

Huawei of China is another great example of how it is emerging as a formidable competitor for Cisco based on its strategy to leverage China for low cost components and India for critical software development.

Some western multinationals like IBM have got it right. IBM has located its chief procurement officer in China, and has over 70000 I.T engineers in India to provide low cost high quality services to clients globally.

These are great examples of how China and India can significantly transform a multinational's global cost structure.

Despite belonging to the same continent and being neighbors, these countries have significant political, social, and cultural differences. The authors capture this very well and conclude that these countries are not twins but distant cousins.

The comparison of strengths and weaknesses of these countries from the perspective of a multinational looking at business opportunities and strategy makes interesting read.

The compelling argument is not whether a company should be present in China or India, but should have a solid China+India strategy if it has to succeed in the twenty-first century.

The global economy has clearly become multi polar, and this needs a global mindset, and the book brings out a very good framework to describe this. This does not mean that companies should have loosely dispersed regional autonomous hubs, but on the contrary, become a tightly integrated global company with world class global processes, that are modularly dispersed, based on the best place to execute, and yet achieve cross border synergies. This needs a mindset to reset global value chains.

The core theme of the book is to take advantage of China and India simultaneously to utilize economies of scale, complimentary strengths and also to diversify political and economic risks.

Highly recommended.

Mega-markets, largest emerging middle class, fastest growing economy's, new rich; all buzz words that command attention from any executive or business owner looking for new customers, especially during tough economic times.

"Getting China and India Right" sheds light on the challenges and opportunities involved with entering this market, as well as lessons from successful and non-successful efforts by corporations who have already made the attempt.

Key points in the book state that only having a presence in China and India is very different than fully utilizing their full potential as a platform for exponential growth. Also important to note is that although there is great potential, there are also tremendous challenges and risks involved. Business models that work well in the U.S. or in Europe do not guarantee success in China and India, but those who get it right enjoy fantastic success. These topics are discussed throughout the book in an easy to read fashion.

Our business provides a platform for U.S. realtors to reach Chinese homebuyers. As the U.S. housing market continues to struggle, it is only natural that realtors would look to this new market for qualified prospects. While international real estate does not hold the same physical burdens as traditional manufacturing or brick and mortar business structures, the importance of understanding cultural nuances are vital in providing a reliable conduit for our clients. I recommend any CEO concerned with the global business landscape to read this book. These countries will have a large affect on how business is done in the very near future.

Anil Gupta and Haiyan Wang's "Getting China and India Right" is a unique contribution not only to literature on doing business in each of these two giants, but importantly and much more accurately, for any multinational and business looking to maintain its competitiveness on the global stage. It suggests and explains the need for a complete shift in the central assumptions of many senior leaders towards a more global mind-set and the goal of developing globally integrated enterprises that thrive on the different strengths of India, China, and other countries.

Gupta and Wang provide articulate and insightful information that is helpful to any multi-national or entrepreneur entering China or India. However, they go much further: the book explains how a company's business in China or India can be integrated and actually help that company be much more successful and competitive both in and outside of India and China. The book brings a unique global perspective by rejecting the false dichotomy between India or China, and focusing on India and China, and how "getting it right" (i.e.: both of them right) will help your company become more successful in the global arena. They point out that the right questions to ask are how best to pursue both China and India rather than which one; and how getting it right can benefit your company on a macro and global level.

Another unique and valuable perspective provided by "Getting China and India Right" is that it explores and explains the forces that are propelling Indian and Chinese companies to be successful at home, and increasingly successful abroad, and strategies for beating these home grown competitors (or, if appropriate, joining forces with them). Again, the focus on leveraging the strengths of India and China, respectively, helps explain how your company can be competitive and beat the local competition both at their home and abroad.

Finally, the book takes a long term view to creating the successful company of tomorrow and how, today, your company should focus on the realities and trends resulting from China and India's rise and capitalize on each of these countries different strengths for global competitiveness.

I recommend this book for any senior business leader or entrepreneur interested in growing an integrated global company that leverages and integrates the strengths of China, India, and their home market.

Mark Williams
DLA Piper, Partner (former Managing Partner of Beijing Office)

Gupta and Wang have written a book that every manager in a large corporation must take to heart. The current downturn has confirmed that our lot on this planet is closely linked and it is no longer sufficient to see the world limited by the boundaries of the nation one lives in. Over 30% of the world population lives in the two countries and present huge opportunities and threats. The authors clearly have a deep understanding of the two economies and, through numerous examples, describe their differences and their similarities.

I recently blogged about John Seely Brown's position that innovation occurs on the Edge ([...]). China and India is where the Edge is and we need to get closer to where some of the most relevant innovation is occurring. Gupta and Wang provide the How To?

Not China or India, China and India! This changes the ball game.

Gupta, and Wang establish a new strategic paradigm. For the first time, there is a book that brings China and India together, otherwise misplaced as one or the other in existing literature. Comparing and contrasting these two seemingly recession-proof economies, the authors forewarn top Fortune companies to get very busy with a plan now, if not already on. They prove why strategic leadership must think of these two mega markets hand in hand and not as alternatives.

Specifically, very rich case studies and details of local competition are nicely woven to create an integrated thought process - to propose a thesis, support with relevant data, provide what-one-may-face scenarios.

Like Jay W. Forrester's seminal book Industrial Dynamics (1961) is still a significant statement of philosophy and methodology in the field, this book institutes a unique philosophy for C-level executives for next few years in global strategy area.

The book will be a coherent read in the field of global business as shifting winds of economic power tilt the bottom-line just a bit towards East.