BOSTON, MA--(Marketwire - Jan 28, 2013) - U.S. and Western business leaders, be warned -- Chinese and Indian entrepreneurs are after your markets and your customers, both in Asia and at home. And they're like no competitors you've ever faced.
Entrepreneurs in China and India display an "accelerator mindset." They talk of their "ten-by-ten" strategy -- tenfold growth in the next 10 years. Their outlook is marked by huge ambitions -- a big-picture vision, colossal drams and no limits on opportunities. They describe themselves as "Ph.D.'s" -- "poor, hungry and driven." And the companies they've created -- including Tata, Lenovo, Huawei Technologies and the Godrej Group -- have set their sights not only on home-market dominance but on strong positions in the West as well. Americans and Europeans could benefit if they consider some of the same approaches.
Those are among the conclusions of The $10 Trillion Prize: Capturing the Newly Affluent in China and India (Harvard Business Review Press, October 2012), a new book by Boston Consulting Group (BCG) consultants Michael J. Silverstein, Abheek Singhi, Carol Liao, and David Michael.
"These entrepreneurs are unlike their Western counterparts," Mr. Silverstein says. "They do not feel beholden to anyone, and are not bound by textbook business rules or the constraints of business logic. And they are natural risk-takers. They focus on execution, they're not afraid of mistakes and they don't aim for perfection. They believe instead that they can grow past their mistakes thanks to the rising tide of demand. All of these qualities make them highly unpredictable and therefore formidable competitors."
Chinese and Indian Entrepreneurs Rise to Become Global Challengers
Entrepreneurial companies in China and India have risen to dominance in the past decade -- and not only in their home markets. In 2000, there were eight Chinese companies and one Indian company in the Fortune 400. By 2010 the Fortune 500 included 46 Chinese companies and eight Indian companies. Several Chinese and Indian entrepreneurial companies have grown to become challengers on the global stage, including:
- India's Godrej Group, where chairman Adi Godrej first defined the "ten-by-ten vision," has created new markets through innovative partnerships with Western appliance-makers -- its tiny, efficient Chotukool refrigerator was designed for rural Indian customers who have unreliable electricity and limited space.
- China's telecom leader Huawei Technologies, where chairman Ren Zhingfei, an Army veteran who says he leads his "pack" with a "wolf spirit," allowing them to "swarm the market" with a huge service staff, and applies Maoist principles to management, emphasizing a "rural-first" strategy, promoting self-criticism, combining theory and practice by rotating managers upwards and downwards, and applying dialectic to keep staff intensely optimistic -- and focused on the next crisis. He led an innovation effort that made the company the world's largest patent applicant by 2009; it is now making inroads in Russia and Europe, and exploring the U.S. market despite American security concerns.
"What sets the leaders of these and similar companies apart is their extraordinary inventiveness, an enormous capacity for industry, and exceptional willpower. They really do not take 'no' for an answer," Mr. Silverstein says.
According to Mr. Silverstein and his colleagues, several qualities distinguish Chinese and Indian entrepreneurs: They start with a clean slate, instead of following rulebooks or existing templates; focus on a specific opportunity, identifying niches such as Godrej's move to create a rural appliance market; scale up or refocus as needed, reconfiguring staff and production on the fly to take advantage of fast-moving opportunities; learn by doing, without investing significant time or resources in plans and studies; and drive relentlessly forward, moving past mistakes in the conviction that future growth will take care of present challenges.
While Chinese and Indian entrepreneurship can be seen as a threat, it might also revitalize American and European business, Mr. Silverstein says. "The irony is that entrepreneurs in China and India are pursuing their own version of the American Dream. If Americans embrace this new wave of competition, they might rediscover some of the qualities that made them successful in the first place. This revival of the entrepreneurial spirit might turn out to be China's and India's most enduring export."
For more information, please go to www.bcgperspectives.com/10trillionprize.
Follow Michael Silverstein on Twitter @MJSilverstein.
To arrange a conversation with one of the authors and/or receive a copy of The $10 Trillion Prize: Captivating the Newly Affluent in China and India, contact Frank Lentini of Sommerfield Communications at (617) 939-9094/ Lentini@sommerfield.com.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 74 offices in 42 countries. For more information, please visit bcg.com.
Bcgperspectives.com is a new website -- available on PC, mobile phone, and iPad -- that features the latest thinking from BCG experts as well as from CEOs, academics, and other leaders. It covers issues at the top of senior management's agenda. It also provides unprecedented access to BCG's extensive archive of thought leadership stretching back almost 50 years to the days of Bruce Henderson, the firm's founder and one of the architects of modern management consulting. All of our content -- including videos, podcasts, commentaries, and reports -- can be accessed via PC, mobile, iPad, Facebook, Twitter, and LinkedIn.