Hbr How Emerging Giants Can Take on the World Essay

1. Introduction

This reflection paper discusses an article, “How Emerging Giants Can Take on the World”, which is written by John Jullens and published in 2013 by the Harvard Business Review. The article shows that failure of companies in emerging market and emphasizes importance of corporate capabilities. In the article, the author explains reasons why companies in developing countries fail to survive in emerging markets by showing BYD and Cherry’s cases and suggests four approaches how they can build up capabilities in four stages of develop phase to survive.

2. Summary

Emerging-market corporations need to develop their own capabilities to overcome and to succeed in competitive international market. This means that they should not be focused too much on chasing growth which triggers failure to invest in improving their own capabilities in area of such as operations, management, and innovation. The result of being obsessed with expanding their business broadly, emerging-market corporations often lack of enough power to improve genuinely important thing in managing business. For example, though BYD had had great eager to be successful in worldwide electric vehicles market, they did not consider much how to develop the quality of product they produce. Also, Chery aggressively expanded their multiple models and brands, though they lacked of strength to manage all of them.

Throughout these two examples, we can detect the reason why many of emerging-market corporations have had failure in global market and why they are limited to be success compared to MNE in developed countries. Thus there are four steps for them to follow to improve their proper strength to win other competitors. The first step is seize the moment which means emerging-market corporations should move as quickly as they can to get business opportunities by focusing on rudimentary capabilities in payroll, finance, factory operations, and employee management. The next step is Build strength which is the very critical step to set right business model for the corporations in terms of profitability. In this step, they should carefully build from their basic capabilities to specific competencies which fit well with their core strength. The third step is Scale and consolidate which is taken by one of the Chinese automotive supplier Wan- xiang. It means that they should rather scale their capabilities up step-by-step than speedily expand not considering proper operations. The final stage is Move up and out. In this step, eventually emerging-market corporations can expand their business pursuing higher-value customer segments and international markets. This stage requires them to have a portfolio to integrate all of their capabilities such as innovation, advanced-technology, sophisticated marketing and sales skills which leads to be with their own distinct FSA in their business. In the meantime, some emerging-market companies which have moved on to the final stage shows a radical new phase such as breaking up into nimble, globally dispersed, semi autonomous units held together by governance organizations. It is not sure that this new phase of emerging-market corporations is emerging giant in the future, but it might be that because Haier, one of the emerging giant nowadays have moved up to this new structure and it has succeeded in many areas which is weakness of other emerging-market corporations.