The Danish Chamber of Commerce, Norwegian Business Association, The Swedish Chamber of Commerce and The Finnish Business Council have invited Professor of Management Hellmut Schütte from CEIBS to share his thought on the competition in China and its global implications for multinationals.

Companies, not countries compete. Countries continue to matter though. Greater market size and openness towards the outside world provide emerging competitors from China with more conducive starting conditions than their forerunners from Japan and Korea ever had. For globally operating firms the stakes are therefore much higher today and go much further than the Chinese market alone. In a high number of industries China is already the largest market in the world by volume and in an increasing number of industries the country has moved to the center of world markets. Battles fought here today may decide world market outcomes.

For many profitable Western firms the success in China is deceiving, if it is achieved only in the top segment of the market. The highest expansion in terms of volume and technology can be found in the ‘good enough’ or middle segments. Chinese companies move towards a dominating position in these segments through the build-up of enormous economies of scale and fast technological upgrading. In doing so they are beginning to move closer to the strongholds of the old multinationals in the top segments. Responding to this new competition turns out to be difficult and threatens traditional ways of strategy development and organization of Western multinationals.

It is unlikely that strategies of Western firms based on thorough analysis, low growth and high margin assumptions and risk aversion attitudes can work in environments that are fast moving, accepting of trial and error and low margins and are driven by a shared and deeply embedded optimism. Realizing this, the first multinationals are giving room to a more radical adaptation of ‘indigenous’ strategies for China and other emerging markets that deviate from global norms. Radical localization and disruptive supply-chain optimization are examples of this.

After many years of hesitation, a shift of power within the organization of Western firms is also taking place. More board members are placed in Asia than ever before along with heads of global business units and functions. The role of country and regional managers is also strengthened again. This indicates that the model of the HQ-based, centralized and forward projecting multinational has reached its limit.

Speaker

Professor Hellmut Schütte is a Distinguished Professor of Management at CEIBS, China Europe International Business School, one of Asia’s leading business schools.

At CEIBS, Professor Schutte holds the European Chair for Global Governance and Sino-European Business Relations.

He is also Emeritus Professor of International Management at INSEAD whose faculty he joined in Fontainebleau, France, in 1981 after a career in the areas of marketing and investment banking. Professor Schütte studied economics and business administration in Germany and obtained his doctorate from the University of St.Gallen, Switzerland. He was visiting professor at the University of Tokyo, visiting professor at Boston University, and visiting scholar at Harvard University.

He is a well-known speaker in conferences and is a regular contributor to the World Economic Forum in Davos and the author of many articles and nine books, among them the best-seller ‘Strategies for Asia Pacific’.

Programme Schedule

18.30-19.00 Registration, fingerfood and drinks

19.00-20.15 Presentation

20.15-20.45 Q&A