China’s vision of its place in the world is evolving fast. For the last fifty years, Western companies have dominated the international marketplace and have generally played by the same rules. But Chinese companies are increasingly determined to compete internationally with established Western multinationals. And while many of us may not have heard of these organizations yet, Western companies already find themselves increasingly challenged head-on, forming new alliances with Chinese partners or being bought outright by Chinese investors.
Strengthened by a large, surprisingly well-educated, low-wage workforce, extensive government support, increased education, and an impressive readiness to adapt with lightning speed, Chinese companies are using revolutionary tactics to take down their competition.
Written from the perspective of how China sees the world and how this vision relates to what is actually happening on the ground inside China, In the Shadow of the Dragon examines important factors involving China’s increasing international expansion. China is already having an important impact in the international world on everything from business to employment and there’s no going back now.
Featuring profiles of key players and eye-opening case studies, In the Shadow of the Dragon provides an in-depth analysis of where Chinese organizations are headed and where they will take the rest of us.
Refreshingly authentic: HEINEKEN chief says it’s vital just to be yourself
Early in his career, Dolf van den Brink, CEO of Heineken since 2020, did everything he could to project an image of authority – including wearing spectacles he didn't need. It wasn't until he learned to be comfortable in his skin that he began to ...
By
Jean-François Manzoni
10 December 2024
Defining sustainability
Summary
In today’s complex and fast-paced business environment,
sustainability has evolved from a buzzword into an essential
element of long-term success. Yet the concept is often misunderstood or oversimplified. Some critics question the
necessity ...
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Access to the Chinese market: An obsolescing bargain?
Summary
With stagnant import volumes since 2021, and import prices at levels below those suggested by fundamentals, foreign exporters face an uphill battle to convert access to the Chinese market into revenues. Notably, the volume stagnation predates the ...
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Feeding the dragon: Revisiting ChemChina’s acquisition of Syngenta
Summary
Basel (Switzerland), March 2024. The acquisition of Syngenta by ChemChina in 2017 was a major event for the agricultural industry and, with a price tag of $43 billion, the largest ever foreign acquisition by a Chinese firm. A number of issues were flagged by analysts as key concerns, including governance, post deal integration, culture conflicts and a lack of synergies. With hindsight, were those concerns valid or had they failed to capture the overarching rationale for the Syngenta deal? Why did the Syngenta board support the transaction when so many other western firms rejected such approaches? More remarkable even was the fact that the CEO brought in to manage the complex acquisition, Eric Fyrwald, was still in place seven years after the transaction, an inordinately long tenure for a chief executive in any setting. What were the keys to this remarkable longevity? How did Eric manage to combine these two hugely different entities into an even more formidable giant? What did it take to balance the cultural sensitivities of Swiss and Chinese shareholders and managers? Could lessons be learned for other executives put in charge of complex, multicultural, transformational acquisitions? The success rate of M&A transactions was notoriously poor: What made this such a different animal?
Reference
IMD-7-2577
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Industry
Food Production, Agriculture;Food Production, Agricultural Services
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Leading cross-cultural teams
Summary
This note explores the critical skill of leading across cultures in global and diverse business environments. It addresses the challenges and opportunities presented by cross-cultural teams, providing leaders with strategies to navigate cultural differences and leverage diversity for enhanced performance and innovation.
The note begins by outlining potential pitfalls in cross-cultural leadership, such as miscommunication, cultural stereotyping and varying expectations around decision-making and work styles. It then highlights the value creation opportunities, including diverse perspectives, enhanced creativity and increased organizational adaptability. A significant portion of the note is dedicated to understanding key areas of cultural difference, including communication styles, decision-making processes, attitudes toward time, relationship expectations, power dynamics and tolerance for ambiguity. It provides a comparative analysis of these dimensions across different national cultures. The note offers ten comprehensive strategies for effective cross-cultural leadership, ranging from cultivating cultural intelligence to managing virtual cross-cultural teams. It emphasizes the importance of developing cultural intelligence (CQ) and provides guidance on how leaders can enhance their CQ and foster it within their teams.
Practical tools, such as a cross-cultural leadership preparation checklist, are included to help leaders apply the concepts in their work. The note concludes with a list of references for further reading on the subject.
Reference
IMD-7-2621
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Overcoming adversity through innovation – Daikin at 100 (A): Leadership lessons
Summary
This case study examines the remarkable evolution of Daikin Industries, a company that demonstrated resilience and innovation over nearly a century. Founded in 1924 by Akira Yamada in Osaka, Japan, Daikin originally focused on manufacturing aircraft components. However, the company pivoted towards refrigeration technology in response to emerging market demands, notably during Japan’s post-World War II economic boom. By leveraging R&D in fluorocarbons and innovative cooling technologies, Daikin established itself as a leader in the air conditioning sector. The case highlights key leadership eras, notably the transformative periods under Noriyuki Inoue. Under Inoue’s stewardship, the company emphasized execution capabilities, prioritizing operational excellence alongside technological advancement. His leadership drove Daikin’s globalization strategy, enabling the company to become the second-largest fluorocarbon producer globally and the foremost player in the air conditioning market. As Daikin approaches its 100th anniversary, it faces contemporary challenges such as climate change and increasing consumer demands for energy-efficient products. The company’s commitment to innovation remains pivotal as it seeks to balance profitability with environmental responsibility. This case prompts discussion on Daikin’s strategic responses to evolving market conditions and the importance of leadership in sustaining growth.
Reference
IMD-7-2618
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Organization
Daikin Industries
Industry
Consumer Goods, Home Appliances
Available Languages
English
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Overcoming adversity through innovation – Daikin at 100 (B): Sustainability lessons
Summary
This case study examines the remarkable evolution of Daikin Industries, a company that demonstrated resilience and innovation over nearly a century. Founded in 1924 by Akira Yamada in Osaka, Japan, Daikin originally focused on manufacturing aircraft components. However, the company pivoted towards refrigeration technology in response to emerging market demands, notably during Japan’s post-World War II economic boom. By leveraging R&D in fluorocarbons and innovative cooling technologies, Daikin established itself as a leader in the air conditioning sector. The case highlights key leadership eras, notably the transformative periods under Noriyuki Inoue. Under Inoue’s stewardship, the company emphasized execution capabilities, prioritizing operational excellence alongside technological advancement. His leadership drove Daikin’s globalization strategy, enabling the company to become the second-largest fluorocarbon producer globally and the foremost player in the air conditioning market. As Daikin approaches its 100th anniversary, it faces contemporary challenges such as climate change and increasing consumer demands for energy-efficient products. The company’s commitment to innovation remains pivotal as it seeks to balance profitability with environmental responsibility. This case prompts discussion on Daikin’s strategic responses to evolving market conditions and the importance of leadership in sustaining growth.
Reference
IMD-7-2619
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Organization
Daikin Industries
Industry
Consumer Goods, Home Appliances
Available Languages
English
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Overcoming adversity through innovation – Daikin at 100 (C): China market lessons
Summary
Daikin’s success in the Chinese air conditioning market serves as a compelling case study in strategic adaptation and collaboration. Following its entry into the market in the 1990s, Daikin faced formidable competition from well-established domestic brands like Gree and Midea. Despite the initial challenges of breaking through in a fragmented and competitive landscape, Daikin’s innovative inverter technology became a distinguishing feature of its product offerings. The watershed moment in Daikin’s trajectory occurred in 2008 when it formed a strategic partnership with Gree, China’s largest air conditioner manufacturer. This collaboration enabled Daikin to tap into Gree’s expansive distribution network and manufacturing expertise, significantly enhancing its own market reach. The partnership proved mutually beneficial; Gree capitalized on Daikin’s advanced inverter technology while Daikin secured a foothold in a market driven by increasing consumer demand for energy-efficient solutions. By 2012, inverter air conditioners claimed over 60% of the Chinese market share, a figure that surged to over 90% by 2024, illustrating the success of their joint efforts. Furthermore, Daikin’s commitment to sustainability was manifested in its pioneering use of HFC-32 refrigerant, known for its low global warming potential. By openly licensing HFC-32 patents globally, Daikin not only positioned itself as an environmental leader but also fostered industry-wide innovation. This case highlights the critical importance of strategic partnerships and innovation in overcoming competitive challenges and underscores Daikin’s role as a transformative force in the global air conditioning market.
Reference
IMD-7-2620
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©2024
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Organization
Daikin Industries
Industry
Consumer Goods, Home Appliances
Available Languages
English
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Refreshingly authentic: HEINEKEN chief says it’s vital just to be yourself
Summary
Early in his career, Dolf van den Brink, CEO of Heineken since 2020, did everything he could to project an image of authority – including wearing spectacles he didn't need. It wasn't until he learned to be comfortable in his skin that he began to ...
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Research Information & Knowledge Hub for additional information on IMD publications
Red alert: Is China's recent export growth so exceptional that foreign officials and corporate executives should be losing sleep?
Summary
This year China has been repeatedly accused of resorting to export-led growth (as if that were a crime), flooding world markets with goods, and exacerbating trade tensions. In this briefing I provide a measured, evidence-based review of recent Chi...
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Are Chinese exports causing a protectionist backlash? Is it time to switch sourcing to ASEAN?
Summary
The trade policy stance of foreign governments to China’s goods exports is reviewed here. A balanced approach is taken— examining new import reforms facilitating sourcing from China as well as new import curbs. Further perspective is provided by c...
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