Strategy for Success in Asia

Mastering Business in Asia

Andrew Delios, Kulwant Singh

• Publisher: Wiley
• Year: 2012
• Print ISBN: 9780470821374
• eBook ISBN: 9781118178720
• Edition: 1
• Topic: Business
• Subtopic: Decision Making
• Index: Business

In order to achieve success, managers need to understand the strategic issues in Asia. Strategy for Success in Asia covers areas from the uniqueness of Asia like its economic and cultural diversity to the roles of governments and the importance of alliances. One of the first books to offer a perspective effective company strategy and how local and multinational companies can achieve strategic success in Asia. This important book is for anyone who has a stake in Asia or has plans to do business in it.

CHAPTER 1

Strategy

This book focuses on strategy and strategic thinking in Asia. Leaders who think strategically will be better able to identify and exploit the myriad opportunities that exist in Asia, avoid the equally widespread risks, and develop strategies that can enhance the probability of success for their firms.

In this chapter, we develop a framework for leaders to think strategically about business, to help them focus on the key factors that determine success. This chapter provides an overview of strategy and the factors that determine business strategy. We focus our overview on a strategic thinking framework which provides a systematic way to evaluate core business issues and focuses on the key factors that influence business success. This framework will help managers to fulfill one of their primary responsibilities – the development of strategies that will move their firms toward success. The strategic thinking framework is not specific to Asia, but is applicable to all business contexts. Even so, this framework is particularly useful in Asia, and is especially appropriate for managers in Asia-based firms.

THINKING STRATEGICALLY

All choices have implications and all actions have consequences. Senior business leaders, in particular, regularly make decisions that have important, widespread, and long-term impact. Leaders must consider the impact and implications of their decisions. Doing so is, in effect, thinking strategically.

Strategic thinking is the process of considering the consequences of one’s actions. A business leader who thinks strategically is one who identifies a desired outcome, and evaluates alternatives and their consequences in selecting the choice that will best achieve that outcome. If the focus is on the firm’s success, a leader who thinks strategically first identifies measures of firm success, next considers alternative means for achieving this success, and then selects the strategy that is most likely to succeed. The strategic leader therefore knows what he or she intends to achieve, and selects from the many factors that influence success and from the alternatives available, the best means for achieving success.

Possibly the most fundamental of all questions in business is: “What determines business success?” This is an issue that is at the core of every senior manager’s job. A fair assumption, therefore, is that successful managers can and do devote considerable time and attention to understanding this issue from a strategic perspective. However, it is difficult to provide a clear or comprehensive answer to this question because of the complexity of business, the multiple external factors that impact business success, the multiple roles that leaders play in influencing firm performance, and the multiple paths that exist for achieving success. Another reason is that many managers are inclined to action, rather than to introspection or to retrospective examination of the reasons for their successes and failures. Relatively few leaders think systematically about the issue of business success, so that even the most successful managers may find it difficult to identify the reasons for their success.

Most explanations for firms’ success take the form of a list of resources, activities, functions, and environmental factors. Most of these are often unrelated, and some may appear to be almost random influences on business outcomes. It is usually difficult to explain how the factors in the list specifically influence success in a particular case. It is even more difficult to use this approach to generate insights and strategies to enhance future success. The fundamental problem with this approach – which we term the “laundry list” – is that it generates a random collection of generic factors, most of which are important to some extent in many situations, but which collectively, do not provide a meaningful or rigorous explanation for business success in a particular context.

The danger in focusing on a laundry list is that by indicating that everything influences firm success to some extent, it suggests that nothing is of particular importance. Further, a laundry list often comprises many operational or tactical issues, distracting managers from strategic influences on performance. More insidiously, a laundry list may reinforce the impression that managers are powerless to control the many factors that affect firm success. This may reinforce a manager’s tendency to focus on concrete and urgent operational problems, rather than on the nebulous, long-term, and conceptual issues related to strategy.

The laundry list approach is likely to create senior managers who think and work tactically or operationally, and who focus on short-term opportunities or on correcting mistakes. This approach is unlikely to result in sustained success in complex and rapidly changing environments, such as those found in many Asian countries. To deal with such situations, leaders require an approach that is in essence the antithesis of the laundry list approach.

The strategic thinking approach dictates a systematic, organized, and iterative process to developing and implementing strategies for business success. A strategic approach to answering the question, “What determines business success?” defines firm success, identifies the many factors that influence firm success, generates alternative means of achieving success, and selects the alternative that is most likely to achieve the desired success. This approach or framework allows leaders to focus on the key factors that determine firm performance. A strategic thinking framework should be comprehensive, but intuitive and easy to use. It should allow leaders to focus on key strategic factors and encourage them to think strategically.

Successful managers on their success

“Many people dream of success. To me success can only be achieved through repeated failure and introspection. In fact, success represents 1% of your work which results from the 99% that is called failure.”

Soichiro Honda, Honda Motor

“Do your homework and start small. When you are in a new place, learn. If the signs are positive, then don’t be afraid to expand.”

Kartar Thakral, Thakral Group

Every successful company “is built on an idea that is taken seriously in the marketplace. For this, an idea has to achieve one or more of the following: improve customer satisfaction, reduce cost, reduce cycle time, improve productivity, increase customer base, or improve comfort level of customers.”

Narayan Murthy, Infosys Technologies

“All you need is the best product in the world, the most efficient production in the world, and global marketing.”

Akio Morita, Sony

We now introduce the strategic thinking framework that is the foundation for this book. This framework is a guide for firm leaders to think strategically and is a systematic means for developing firm strategy.

A FRAMEWORK FOR THINKING STRATEGICALLY

In Figure 1.1, we present the core elements of a model for thinking strategically for business success. For reasons that will become clear below, we call this model the “Customers-Competitors-Competencies” model or, in short, the “3Cs” model.

Figure 1.1 The “Customers-Competitors-Competencies” Model: Core Elements

The core of the “3Cs” model comprises the relationships between leadership, strategy, and success. This model rests on two key propositions or relationships, both of which are central to the job of all leaders and fundamental for firm success. First, leaders are responsible for firm strategy and success. Second, strategy is the primary determinant of firm success.

Leadership

The first and most basic proposition at the core of the “3Cs” model is that senior leadership is responsible for the strategy and success of their organization. The model confirms that leaders have two primary responsibilities: they are responsible for developing their organization’s strategy and for implementing this strategy successfully. We will go further and suggest that these are the only two useful tasks for leaders. The many other activities that leaders typically undertake are often necessary but distract them from their primary tasks. These other activities always cost time and money, but often do not add commensurate value.

Many senior managers are not able to devote sufficient attention to developing their firm’s strategy. Some leaders may simply be too involved in urgent and routine activities to commit sufficient time to long-term issues such as strategy. Others may rely on teams of advisors or managers to develop strategy for them, or may simply retain the strategy that the firm has always implemented. Some leaders wait for the strategy to emerge by default from the actions and decisions of middle managers. Yet others assign the task to teams of strategic planners or to external consultants.

Some managers believe that it is relatively easy to develop a strategy and that the greater challenge lies in its effective implementation. Another common view is that implementation is the responsibility of middle managers and employees, not of senior leaders. These leaders typically hold their managers accountable for the implementation of detailed plans and for achieving specific targets. They then attribute failure to achieve these targets to the poor implementation of the strategy by middle and junior managers. On the other hand, successful implementation and achievement of targets is attributed to the quality of the leader’s strategy. It is worth repeating the principle that, regardless of these attributions, the chief executive is responsible for the effective implementation of his or her organization’s strategy.

Leaders must recognize that their primary responsibilities are to develop and implement their organization’s strategy. They cannot delegate the development of strategy to other managers. A leader obviously cannot develop strategy individually and completely independently, and must actively solicit ideas and feedback from the organization. Yet, he or she must be directly involved in the process of developing the strategy and must primarily determine its contents.

Having developed the strategy, the leader must then implement it. Implementation is the process of doing everything necessary to convert the strategy from ideas into action, to maximize the chances of its success. The leader must be heavily involved in implementation, to keep track of progress, problems, and contingencies. This will allow the rapid detection of delays and deviations, both of which are inevitable, so that the leader can intervene selectively to put the implementation back on track or, where warranted, to modify the strategy. Leaders must therefore play central roles in the development and implementation of their organization’s strategy.

Strategy

The second key proposition of the “3Cs” model is that business success depends fundamentally on having a strategy to achieve that s...

Table of contents

• Cover
• Contents
• Title
• Copyright
• Dedication
• About the Series
• Preface
• Acknowledgments
• Chapter 1: Strategy
• Chapter 2: Strategy in Asia
• Chapter 3: Strategies for Working with Governments in Asia
• Chapter 4: Strategies for Profitable Growth
• Chapter 5: Strategies for Regional Expansion in Asia
• Chapter 6: Alliances for Success
• Chapter 7: Acquisitions for Success
• Chapter 8: Size and Scope for Success
• Chapter 9: Strategies for Success in Asia
• Index