Beyond Asia: developed-markets perspectives
Lessons to learn
Whether minimizing threats or maximizing opportunities, developed-market companies need to think more broadly about their strategic options.
Asian companies are expanding globally at an extraordinarily rapid rate.
Over the next decade, we are likely to see a new generation of Asian multinationals competing across a wide range of industries, with brands, management capabilities and intellectual property that match or exceed those of the established players.
This trend is often framed as a threat to developed-market companies and there is undoubtedly some truth to this.
Companies that do not consider how Asian expansion will affect their business will surely find themselves blindsided, and see new spheres of competition erode their core markets.
However, developed-market companies must also bear in mind that this trend presents powerful opportunities. For the near future, Asian companies will be looking for the following across a number of areas:
- Management capabilities
Developed-market companies can provide them, through partnerships, alliances or M&A, in return for capital or the ability to create different cost structures and gain access to huge Asian markets.
Whether minimizing threats or maximizing opportunities, developed-market companies need to think more broadly about their strategic options. This will require creative thinking, but also a willingness to overcome inertia and complacency.
“Executives in developed-market companies need to realize two things,” says Tarun Khanna, Jorge Paulo Lemann Professor at the Harvard Business School. “First, that Asian companies can be serious competitors and second, that they have a lot to learn from them.”