Enterprise China

Chapter 6HOW TO COMPETE WITH CHINA: STRATEGIC OPTIONS AND ACTIONS

In Chapters 1 through 4, we discussed at length the competitive strategy of Enterprise China. We first focused on its efforts to reverse its external dependency. We next discussed its intent to dominate domestically. We subsequently examined how Enterprise China plans to leverage its dominance at home into leadership abroad. In Chapter 5, we explored the strategic options and actions that foreign firms with operations in China might consider. In this chapter, we zero in on the strategic options and actions for firms that have essentially no operations in China but nonetheless may find themselves in competitive battles with Enterprise China.

Although roughly 1 million foreign companies have operations in China, the vast majority of firms have no operations there at all. By one estimate, 115 million businesses exist worldwide. Another estimate pegs the number at 295 million.¹ Although the precise number is impossible to know, we safely can say that today more than 99% of the firms around the world do not have operations in China.

TWO COMMON REACTIONS

In our interviews with scores of executives whose firms fall in this category, we encountered two common reactions to the rise of Enterprise China. The first group we label “content but curious.” The second we describe as “nervous but nonplussed.”

Content but Curious

The first category of executives whose firms have no operations in China recognize that China is ...