The China Factor

Leveraging Emerging Business Strategies to Compete, Grow, and Win in the New Global Economy

Amy Karam

• Publisher: Wiley
• Year: 2016
• Print ISBN: 9781119274018
• eBook ISBN: 9781119274247
• Edition: 1
• Topic: Economics
• Subtopic: Business Development
• Index: Economics

The Innovation of Globalization – proven strategies to succeed and out-compete emerging competition

Does your company know how to compete effectively in the evolving global business arena? What tactics must your company use to overcome price discounting wars that cut into your margins? What are the strategies your new rivals incorporate that may prove more valuable to customers than the superior products you offer?

The China Factor equips Western businesses with a practical framework for competing successfully in today's ever-changing global markets. Written by an expert in competitive strategy and global market expansion, this book is packed with insights gained through first-hand experience leading competitive programs at a high-tech multinational corporation and extensive research. 

When it comes to globalization, the rules have changed—what was once nice-to-know is now need-to-know, and this book lays it out in a clear, no-nonsense style. Based on cases with over 50 countries, you will learn why a premium product, though domestically successful, may not be well received in foreign markets. You'll also discover the critical factors that contribute to success in both emerging and established markets. Disruptive competitors are transformed from threats to examples as you learn to recognize opportunities for re-evaluation, and shift your strategy to stay ahead of the curve.

The economic rise of China and other new entrants is challenging Western companies in new ways. This book explains why, and provides actionable strategies for success in any market.

• Grow and maintain an Innovation Advantage using 5 models
• Learn from disruptors how to win your emerging markets customers
• Understand the power of politics in business
• Develop a deeper Culture IQ to expand your customer base
• Use a 5-part Strategic Framework to formulate new sales tactics

You're already well-aware of the global threat to Western business, and endless analysis only goes so far toward a solution. You need to know how to respond, survive, and thrive, and just how to regain the competitive edge. The truth is that Western companies must change they way they do business, and push innovation beyond the product and into every aspect of every operation – they need to be innovative in how they do business abroad. The China Factor provides a clear action plan, and case studies from global leaders like Cisco, Xiaomi, and Apple with insightful strategies for changing and winning the game.

Section III
The West

Chapter 13
Recommendations for the West and Application of the 5Ps

Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win.

—Sun Tzu, The Art of War

We've looked at market dynamics and how the West got to where it is today. We have examined the threats, challenges, and opportunities for the East and the West. We have also gained an understanding of the Chinese culture and the way they do business (which is also applicable to other emerging entrants) within the context of each of the 5Ps.

In Chapter 4 we articulated what the West could be doing better and areas in which it is weaker within the new global dynamic. Now we will analyze the West's behavior and look at some suggested modifications to its current approach, based on the 5Ps categories. We will recommend new ways for the West to do business globally—how the West can change its game in order to succeed.

We have explored the culture of the Chinese and their ways of doing business, but what about Western culture? As we have discussed, the mind-set of Western culture is generally impatient, with a short-term strategic view and the desire for a quick return on investment. In addition, Westerners can be culturally insensitive and underinformed about cultures and customs outside of their own. We will delve into this in more detail in subsequent chapters.

Recommendations for the West

Our recommendations, derived from extensive analysis and actual application, are summarized next in a 13-point plan. We are going to look at each of these in further detail throughout Section III, which looks at the 5Ps for the West.

1. Go global.Focus on new market development. Yes, there is a viable market outside the West. Go after it wholeheartedly; do not just dabble. This is no longer a nice-to-have choice but a must for your survival.
2. Target emerging markets.Recognize that emerging markets are different from developed ones, with longer sales cycles and distinctive challenges. And that going after emerging markets is becoming a necessity, not a novelty.
3. Think long term.It can't always be about simply satisfying shareholder value on a quarterly basis. Short-term emphasis on the numbers affects results in the long run. Learn to take a short-term hit for a long-term gain. It is good for your future.
4. Know your customers—love your customers.Modify your whole offer and meet their true needs, not just your own.
5. Get culturally smart.Get to know the cultures of your new markets. An important success factor as you do business in different countries is to adapt to local norms and practices. Do not underestimate the power of this knowledge. It can easily make or break your deal.
6. Evolve product development.It's about them, not you. Listen to your customers, observe the new market dynamics, and develop offers accordingly.
7. Know your competitor(s)—well.Develop differentiated and comparative positioning.
8. Sell a solution, not a product.Know what your customer needs in order to make a purchase, and make sure you provide all that you can to make it happen. Go beyond just your product offer.
9. Learn sandbox sharing.Others are coming to play in yours, so you should be prepared to play in theirs, too. Coopetition.
10. Get government involved.Often and in a serious way. The West cannot afford to be passive any longer.
11. Stimulate entrepreneurship.Commercialize and monetize your innovations more aggressively and creatively. Leverage government funding allocated to small businesses.
12. Develop and acquire talent.Foster and acquire the skill set that your nation and company needs to compete most effectively.
13. Innovate.Innovation is still your key competitive advantage. Maintain it and evolve it.

In the spirit of tying the frameworks and recommendations together, the table that follows provides a visual depiction of how it all fits.

What the West Needs to Do: The 13-Point Plan Applied to the 5Ps

Product: Solution and Innovation	Price: Value-Add(Value Selling)	Place: Partnerships	Promotion: Customer Relationships	Politics
6. Evolve product development 7. Know your competitors well (positioning) 13. Innovate	8. Sell a Solution	1. Go global 2. Target emerging markets 3. Think long-term 9. Sandbox sharing	4. Know your customers—love your customers 5. Get culturally smart	10. Get government involved 11. Stimulate entrepren-eurship 12. Develop Talent

The 5Ps of Global Marketing

Figure 13.1 reproduces the diagram that we first saw in Chapter 5. As we know, it incorporates the 5th P—politics—into the Marketing Mix. Politics is a critical component of global strategy, particularly with respect to emerging markets. Recall, too, how the traditional 4Ps have been slightly revised with more specific descriptors of the role each plays in the new competitive arena. Again, the two-way curved arrows between each of the 5Ps indicate that the strategic decisions that apply to any one of these Ps affect and influence others.

Figure 13.1 The 5Ps of Global Marketing Framework

The emerging competitor is at the center of the diagram. The reason for this is that these emerging competitors are new to Western companies, and they do business differently—and sometimes more effectively—than Western companies. This requires a change in the globalization strategies of the West. However, modifications in the approach of Western companies also turn impact the emerging competitor, and the straight two-way arrows indicate these fluid dynamics in the global marketplace.

Chapter 14
The West: Product => Solution and Innovation
Modifying the Western Way Based on Your New Market Goals

The general who wins a battle makes many calculations in his temple before the battle is fought. The general who loses a battle makes but few calculations beforehand. Thus do many calculations lead to victory, and few calculations to defeat.

—Sun Tzu, The Art of War

---

Questions Answered in This Chapter

• How do I need to adjust my strategy for targeting new or emerging customers?
• Normally I like to have my new product or evolution perfected before I go to market, but my Chinese competitor keeps beating me to market. What am I doing wrong?
• As I expand into new markets, it seems that my product offer is not as compelling as it is in the markets that I am currently successful in. Why can't I seem to garner market share, despite my history of brand recognition?

---

---

Chapter Outline

1. Product Superiority Doesn't Always Win
2. One Size Does Not Fit All
3. Evolve Your Offers into Solutions: Free Fries and Extra Ketchup (Remember?)
4. Develop Targeted, Market-Appropriate Products
5. Rapid Time-to-Market
   1. Product-Specific Example
6. Product Development Efficiencies
   1. Made in the USA
7. Positioning of Your Product and the Message You Send
8. Compete Hard

---

Product Superiority Doesn't Always Win

One of the most significant changes that a Western company needs to make in their sales positioning strategy in emerging markets, as well as in established markets, is taking a solutions approach to their pitch. Being known for having an innovation advantage, the West is often accustomed to winning business based on having a better, or the best, product compared to other competitor's products. However, customers are demanding more before they say yes to simply the merits of a product. They are looking for a more encompassing solution—one that a...

Table of contents

• Cover
• Praise for The China Factor
• Title Page
• Copyright
• Dedication
• Foreword
• Introduction
• Section I: State of Affairs
• Section II: China
• Section III: The West
• Section IV: Case Studies
• Conclusion
• Acknowledgments
• Appendix A
• Appendix B
• Bibliography and Further Reading
• About the Author
• Index
• End User License Agreement