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Contents
1 Introduction: Needs for New Global Strategies ... 1
1.1 Is the World Flat? ... 1
1.2 Global Strategies for Emerging Countries ... 4
1.3 Perspective of Global Business Strategies ... 6
1.3.1 Directions of Global Strategies ... 6
1.3.2 Products and Services for “Good-Enough” Product Markets ... 7
1.3.3 Strengthening Cost Competitiveness ... 8
1.3.4 Creating Strong Business Models That Discourage Catch Up ... 11
1.3.5 Need for Strategies to Respond to Local Needs ... 13
1.3.6 Management Strategies Integrated at the Global Level ... 14
1.4 Structure of This Book ... 15
References ... 17
Part I Global Business Strategy 2 Management Strategies for Global Businesses ... 21
2.1 Introduction ... 21
2.2 Concepts of Corporate Management Strategy Theory ... 22
2.2.1 Scope of Management Strategy ... 22
2.2.2 The Three Cs and SWOT Analysis in Management Strategy ... 23
2.2.3 Global Strategies and Differences in Internal and External Business Environments ... 26
2.2.4 Is China a Market or a Factory? ... 28
2.2.5 Value Chains and Global Strategy ... 33
2.3 Relationship Between Headquarters and Local Entities ... 35
2.4 Summary ... 38
References ... 40
3 Changes in the Global Economic Environment ... 41
3.1 Introduction ... 41
3.2 Long-Term Economic Growth by Country ... 42
3.3 The Global Economic Forecast for 2030 ... 46
3.4 Competitiveness Rankings: IMD’s World Competitiveness Yearbook ... 49
3.5 Summary ... 54
References ... 55
4 Comparison of Economic Institutions in China and India ... 57
4.1 Introduction ... 57
4.2 Comparative Institutional Analysis of China and India ... 59
4.2.1 Overview ... 59
4.2.2 China: State-Led Strategic Foreign Investment Policies .. 64
4.2.3 India: The Steady Progress of a Democratic State ... 65
4.2.4 Comparison of Political Systems ... 66
4.2.5 Comparison of Economic Systems ... 68
4.3 Global Strategy Implications ... 71
4.3.1 Institutional Voids ... 71
4.3.2 Importance of Informal Institutions ... 74
References ... 76
5 New Business Model as Response to Competition from Emerging Economies ... 77
5.1 Emergence of Threats Associated with Rise of Emerging Economies ... 77
5.2 Moving from a “Product-Centric” to a “Customer Value” Model ... 79
5.3 Product Architecture and Technological Catch-Up ... 81
5.4 Business Models That Are Diffi cult to Be Imitated ... 85
5.5 Infrastructure Exporting as a Systems Integration Business ... 87
5.6 Conclusion... 90
References ... 91
6 India’s Neemrana Industrial Park for Japanese Firms ... 93
6.1 Introduction ... 93
6.2 Background of Neemrana Industrial Park ... 94
6.3 DMIC: Delhi Mumbai Industrial Corridor ... 96
6.4 India’s Industrial Infrastructure ... 98
6.5 Companies Operating at Neemrana Industrial Park ... 99
6.6 The Smart Factory Concept at Neemrana Industrial Park ... 102
6.7 Signifi cance of This Case Study and Suggested Questions ... 103
Part II Fundamentals of Strategic Planning 7 Alliance-Based Global Strategy ... 107
7.1 Introduction ... 107
7.2 Wholly Owned Subsidiary or Joint Venture with Local Companies... 108
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7.3 Alliance Forms and Management Methods ... 110
7.4 Governments as Alliance Partners in PPP Infrastructure Businesses ... 114
7.5 Conclusion... 118
References ... 119
8 Hitachi Construction Machinery: Becoming a Wholly Owned Chinese Entity ... 121
8.1 Introduction ... 121
8.2 Hitachi Construction Machinery (China) Co., Ltd... 122
8.2.1 Background ... 122
8.2.2 Creation of a Joint Venture ... 123
8.2.3 Dissolution of the Joint Venture and the Move to a Wholly Owned Subsidiary ... 125
8.2.4 Post-joint Venture Management ... 127
8.2.5 China’s Business Environment and Its Risks ... 128
8.3 Global and Chinese Construction Machinery Markets ... 130
8.4 A Company with Balanced “Hardware,” “Software,” and “Regions” ... 133
8.5 Importance of This Case Study and Suggested Questions ... 134
Reference ... 135
9 Marketing Theory in Global Business Context ... 137
9.1 Global Strategy and Marketing in Emerging Countries ... 137
9.2 Steps in Marketing Strategy ... 138
9.3 Marketing, Planning, and Execution: The 4Ps ... 141
9.4 Market Analysis Examples: China and India ... 146
9.5 Is the Premium Market a Volume Zone? ... 149
9.6 The Bottom of the Pyramid Business... 151
9.7 Conclusion... 152
References ... 154
10 Shiseido Marketing in China ... 155
10.1 Introduction ... 155
10.2 Corporate Timeline and Overview ... 156
10.3 Shiseido’s Global Business ... 158
10.4 China’s Cosmetics Market and Shiseido’s China Expansion ... 162
10.5 Marketing Strategy in China ... 165
10.6 Competition with Western Brands ... 167
10.7 Signifi cance of This Case Study and Suggested Questions ... 170
References ... 171
11 International R&D Management ... 173
11.1 Introduction ... 173
11.2 Foreign R&D Activities of Japanese Companies... 174
Contents
11.3 R&D Internationalization Theory ... 178
11.3.1 Merits and Demerits of Foreign R&D Centers ... 178
11.3.2 Activities of Foreign R&D Centers ... 181
11.3.3 Selecting a Destination Country... 183
11.4 Reverse Innovation ... 184
11.5 Conclusion ... 186
References ... 188
12 Multinationals’ R&D in China and India ... 191
12.1 Introduction ... 191
12.2 China ... 192
12.2.1 Overview ... 192
12.2.2 R&D Objectives and Regional Diversity ... 195
12.2.3 Differences Due to the Nationalities of Foreign Firm ... 197
12.3 India ... 198
12.3.1 Overview ... 198
12.3.2 Market-Driven R&D in Maruti Suzuki ... 201
12.3.3 Reverse Innovation at GE Healthcare ... 203
12.3.4 Organizational Management of Local R&D Centers ... 204
12.4 Conclusion ... 207
References ... 208
13 Thailand’s National Science and Technology Development Agency and Japanese Firms ... 211
13.1 Introduction ... 211
13.2 Thailand as a Business Destination ... 212
13.3 Thailand’s Science and Technology Policy and a NSTSDA Overview ... 213
13.4 NSTDA and R&D Activities of Japanese Firms in Thailand ... 215
13.4.1 Shiseido Thailand ... 215
13.4.2 Polyplastics Technical Solution Center ... 217
13.5 Thailand’s R&D Environment from the Perspective of Foreign Firms ... 218
13.6 Main Themes of This Case Study and Points for Consideration ... 220
References ... 221
14 Suzuki Motor’s Expansion in India ... 223
14.1 Introduction ... 223
14.2 Suzuki Motors Corporation and Its Overseas Business ... 224
14.3 Suzuki’s Business in India ... 227
14.4 Supply Chain Creation and Local Development Infrastructure ... 232
14.5 India’s Automotive Industry: Huge Opportunities and Increasing Competition ... 234
14.5.1 Hyundai Motor India (HMI) Limited ... 237
14.5.2 Tata Motors ... 238
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14.5.3 Mahindra & Mahindra... 239
14.5.4 Toyota Kirlroskar Motors ... 239
14.5.5 Honda Siel ... 239
14.6 Signifi cance of This Case Study and Suggested Questions ... 241
References ... 241
15 Strategy Integration at the Global Level ... 243
15.1 Main Points of This Text and Remaining Topics ... 243
15.2 Knowledge Management in Global Corporations ... 244
15.3 Diversity in Overseas Entities ... 246
15.4 Organizational Structure Within Global Corporations ... 248
15.5 Conclusion ... 251
References ... 253
Index ... 255
Contents
