Write to Jack & Suzy Welch at editor@businessandeconomy.org
Que: How can Mexico compete in the global economy? (Adolfo Navarro, Monterrey, Mexico)
Ans: Your question says Mexico, but put virtually any developing
nation from Turkey to Brazil in its place and our answer would be the same. First, we’d state that countries whose businesses are trying to establish a foothold in foreign markets need an educated workforce, affordable sources of energy & supportive trade policies. But we’d add another factor that is, in our view, equally important. The businesses that will compete most effectively will be those that have benefited from intense competition right at home. No speed skater or pole-vaulter heads to the Olympics before years of intense competition with the best and brightest in his own backyard. The same goes for companies heading into the business “world games.” But it still doesn’t happen enough. Your own country is a good example. Its economy became “free” in 1994 when the government essentially stopped allowing companies to control entire industrial sectors. But nearly 15 years hence several conglomerates still dominate the national economy. There are exceptions: Cemex, the cement producer, and Grupo Bimbo, the food manufacturer are companies that have grown domestically and now manage to thrive in foreign markets. But Mexico remains a country with too little local competition, which has and will continue to take a toll.
By contrast, both Japan and South Korea prepared their companies well. In the 1970s, the Japanese government encouraged its “zaibatsu” to reform and compete aggressively locally before embarking on foreign foes, the implications most notably felt by the US a decade later, Korea unleashed its “chaebols” with similar results & companies like Daewoo & Samsung quickly established them as formidable competitors.
Que: How can Mexico compete in the global economy? (Adolfo Navarro, Monterrey, Mexico)
Ans: Your question says Mexico, but put virtually any developing
nation from Turkey to Brazil in its place and our answer would be the same. First, we’d state that countries whose businesses are trying to establish a foothold in foreign markets need an educated workforce, affordable sources of energy & supportive trade policies. But we’d add another factor that is, in our view, equally important. The businesses that will compete most effectively will be those that have benefited from intense competition right at home. No speed skater or pole-vaulter heads to the Olympics before years of intense competition with the best and brightest in his own backyard. The same goes for companies heading into the business “world games.” But it still doesn’t happen enough. Your own country is a good example. Its economy became “free” in 1994 when the government essentially stopped allowing companies to control entire industrial sectors. But nearly 15 years hence several conglomerates still dominate the national economy. There are exceptions: Cemex, the cement producer, and Grupo Bimbo, the food manufacturer are companies that have grown domestically and now manage to thrive in foreign markets. But Mexico remains a country with too little local competition, which has and will continue to take a toll.By contrast, both Japan and South Korea prepared their companies well. In the 1970s, the Japanese government encouraged its “zaibatsu” to reform and compete aggressively locally before embarking on foreign foes, the implications most notably felt by the US a decade later, Korea unleashed its “chaebols” with similar results & companies like Daewoo & Samsung quickly established them as formidable competitors.
China, interestingly, still has a largely state-controlled economy, and yet its entrepreneurs have long been irrepressible. When GE bought a lightbulb factory in Shanghai in the 1990s, for instance, Siemens and Philips were the main concern. Within a year or two, however, scores of Chinese start-ups had purchased bulb-manufacturing equipment from Eastern Europe, launching a competitive slugfest. No wonder so many Chinese companies enter the global market armed for bear.
That seems to be what’s happening in India these days. Its economy began liberalisation efforts in the 1990s, but since 2000, they seem to be accelerating, with an increasing number of companies breaking into industries once controlled by a few family conglomerates. New technologies have helped. With the emergence of telecom, and specifically cell phones, a young company with an exciting business model – Airtel – has been able to compete fiercely with market mainstays Tata and Reliance. For all three companies, the innovations sparked by competition have driven growth and profitability – giving each the ability and confidence to expand overseas.
This is not just relevant to developing nations. In the US, established companies in the semiconductor and biotechnology industries are constantly being pushed to new heights by feisty upstarts coming at them. But it even happens in mature businesses. Case in point is the business news channel CNBC. Without any real competition for a few years, it was doing just fine when Rupert Murdoch announced that Fox was launching its own business channel. Seemingly overnight, CNBC looked like a new place, with reenergised anchors, bold new programming and a revamped Web site. Fox won’t stop coming at CNBC, but you can be sure both companies will be better for the fight.
Day-to-day, no normal person wants competition. It makes everything harder. But competition has an incontrovertible way of creating excellence and verve – in a word, edge. And you don’t want to leave home without that.
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2008
That seems to be what’s happening in India these days. Its economy began liberalisation efforts in the 1990s, but since 2000, they seem to be accelerating, with an increasing number of companies breaking into industries once controlled by a few family conglomerates. New technologies have helped. With the emergence of telecom, and specifically cell phones, a young company with an exciting business model – Airtel – has been able to compete fiercely with market mainstays Tata and Reliance. For all three companies, the innovations sparked by competition have driven growth and profitability – giving each the ability and confidence to expand overseas.
This is not just relevant to developing nations. In the US, established companies in the semiconductor and biotechnology industries are constantly being pushed to new heights by feisty upstarts coming at them. But it even happens in mature businesses. Case in point is the business news channel CNBC. Without any real competition for a few years, it was doing just fine when Rupert Murdoch announced that Fox was launching its own business channel. Seemingly overnight, CNBC looked like a new place, with reenergised anchors, bold new programming and a revamped Web site. Fox won’t stop coming at CNBC, but you can be sure both companies will be better for the fight.
Day-to-day, no normal person wants competition. It makes everything harder. But competition has an incontrovertible way of creating excellence and verve – in a word, edge. And you don’t want to leave home without that.
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2008
Read these article :-
ZEE BUSINESS BEST B SCHOOL SURVEY
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global (Print Version)
The Indian Institute of Planning and Management (IIPM)
IIPM Campus
Top Articles on IIPM:-
'This is one of Big B's best performances'
IIPM to come up at Rajarhat
IIPM awards four Bengali novelists
IIPM makes business education truly global-Education-The Times of ...
The Hindu : Education Plus : Honour for IIPM
IIPM ranked No.1 B-School in India, Management News - By ...
IIPM Ranked No1 B-School in India
Moneycontrol >> News >> Press- News >> IIPM ranked No1 B-School in ...
IIPM ranked No. 1 B-school in India- Zee Business Survey ...
IIPM ranked No1 B-School in India :: Education, Careers ...
The Hindu Business Line : IIPM placements hit a high of over 2000 jobs
Deccan Herald - IIPM ranked as top B-School in India
India eNews - IIPM Ranked No1 B-School in India
IIPM Delhi - Indian Institute of Planning and Management New Delhi ...domain-b.com : IIPM ranked ahead of IIMs
No comments:
Post a Comment