Dragons at Your Door: How Chinese Cost Innovation Is Disrupting Global Competitionby Ming Zeng, Peter J. Williamson
The new competitive challenge from Chinese businesses is like nothing seen by Western companies since the Japanese arrived twenty years ago with their cars and consumer electronics. To fend off these fierce competitors, managers must forget yesterday's image of Chinese companies as producers of cheap, low-quality imitations flooding world markets. In fact, by
The new competitive challenge from Chinese businesses is like nothing seen by Western companies since the Japanese arrived twenty years ago with their cars and consumer electronics. To fend off these fierce competitors, managers must forget yesterday's image of Chinese companies as producers of cheap, low-quality imitations flooding world markets. In fact, by strategically implementing what the authors call cost innovation, Chinese firms are advancing into high-end products and industries and competing for such high-value activities as engineering, design, and even R&D. The first book to examine this new competitive force, Dragons at Your Door exposes the strategies, strengths, and weaknesses of these fast-rising Chinese competitors, surfaces the underlying logic that enables Chinese firms to attack high-end industries, and provides critical new insight into these very different competitors.
According to business professors Zeng (of Cheung Kong Graduate School in China) and Williamson (of INSEAD in Fontainebleau, France, and Singapore), the slogan of the China International Marine Containers Group, "Learn, Improve, Disrupt," could just as easily apply, with global consequences, to any Chinese corporation busy using those principles to reinvent manufacturing. The authors reveal that low labor costs are only one advantage enjoyed by Chinese companies, and that the "three faces" of cost innovation (offering high technology at low cost, a near-impossible range of choice and "specialty products" at volume prices) have allowed them to make impressive inroads into markets long assumed impenetrable. This is sobering reading for Western audiences; while the authors avoid the alarms that sound throughout many current business books on China, their dry, factual approach may prove even more unnerving. Though it may paint a disturbing portrait of a competitor formidable even in its infancy, this volume brings to light anecdotes and analysis that are bound to inspire anyone serious about global business or politics today. (June 12)Copyright 2007 Reed Business Information
- Harvard Business Review Press
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- 6.50(w) x 9.60(h) x (d)
Meet the Author
Ming Zeng is Professor of Strategy at Cheung Kong Graduate School of Business, China. He is currently on leave from the School and serves as president of Yahoo China. Peter J. Williamson is Professor of International Management and Asian Business at INSEAD, the international business school in France and Singapore, and the author of Winning in Asia.
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Chinese firms have a cost advantage. That is not news. However, this may be the first book to point out that emerging Chinese competitors ¿ companies as powerful as the ¿dragon¿ metaphor of the book¿s title ¿ also have a managerial advantage: Cost innovation, which involves much more than simply manufacturing products cheaply. Ming Zeng and Peter J. Williamson show how some of China¿s leading manufacturers combine cheap labor, competitive domestic markets and technological innovation to forge a very powerful edge. The authors contend that Western firms may have to relocate high-value activities to China to counter its cost innovation advantage. We suggest that all companies can benefit from this suggestion to march forward instead of retreating in the face of Chinese cost-innovation competition.