Preparing for China's next great leap

Abstract

Purpose

Alert global firms that China plans to become an incubator for top companies rather than simply a low‐cost manufacturing base.

Design/methodology/approach

Outline the strategies for MNCs to penetrate China's expanding market and defend their global position.

Findings

MNCs have figured out the six keys to success: differentiate your products, bring production costs down in line with local cost structures, design offerings for local tastes, create smart partnerships, develop close government relationships and hire strong, “China‐fluent” management, both local and expatriate.

Practical implications

Actions for MNCs to take: Develop Chinese toehold operations into self‐standing and profitable units. Dramatically reset the standards for cost competitiveness. Protect the value segments in your core markets. Treat human resource management as a strategic global function. Accelerate and globalize R&D. Ensure that each business is delivering what it promises to core customers.

Originality/value

Assesses the strategic strengths and weakness of MNCs and potential Chinese rivals.

Citation

Gadiesh, O., di Paola, P., Caruso, L. and Chung Leung, O. (2007), "Preparing for China's next great leap", Strategy & Leadership, Vol. 35 No. 1, pp. 43-46. https://doi.org/10.1108/10878570710717281