What Indian companies can learn from their Chinese rivals
As the founder of the modern Chinese economy, Deng Xiaoping once observed that “No matter if it is a white cat or a black cat; as long as it can catch mice, it is a good cat.”, meaning that one cannot be philosophically wedded to ways of doing things. Deng also used a quote originally coined by Mao Zedong, noting that one must “seek truth from facts”.
These quotes heralded his efforts to create the so-called “socialist market economy” of China as clearly the economic model under Mao had failed to deliver the economic progress the country wanted. Deng’s pioneering efforts unleashed the Chinese economy, generating decades of double-digit growth that has now catapulted China to being the largest economy in the world. This dramatic growth has spurred the rise of giant corporations like Lenovo, Haier, Huawei, Mindray, TCL, BYD, and many others in a span of a couple of decades.
What can Indian businesses learn from the Chinese experience?
You say that humility is important and you keep bringing up examples from India. Do you think India is just as important to watch as all of these Chinese companies you are talking about? Besides humility what are other important things you think we can take away from Indian acquisitions?
For an EMNC, what would you say is the biggest factor in gaining access to a global market?
Mindray Medical International Limited: Going Global from China
Mindray Medical International Limited was the second largest medical device manufacturer in China with global sales of 2.23 billion RMB in 2007. Since 2002, Mindray had launched between seven and nine new products every year across four product lines: Patient Monitoring & Life Support products, the In-Vitro Diagnostic Products, Medical Imaging Systems and Veterinary. In 2006, Mindray’s American depositary shares (ADS) were listed on the New York Stock Exchange. By the end of 2007, Mindray had sold medical devices to over 37,500 hospitals and clinics in China. It had 12 international offices and its products were sold in more than 140 countries.
However, the company’s US performance had not lived up to expectation and, recently, Mindray founder and chairman Hang Xu had been approached by a leading investment bank to discuss the potential acquisition of Datascope, a mid-sized American producer of medical devices for the global marketplace. What should Xu do?
Price Competitor to Value Competitor
Emerging market companies have to graduate from competing with multinationals on price to building their own global brands. China has quickly become famous for its ability to churn out high quality electronics and precision medical devices as its industries move up the value chain. But while the country has proved itself as a producer, few of its companies are emerging as global leaders. Until now, those that have gone global have competed on price, not on brand and they have to build their value proposition to establish themselves as global companies.
