China draws up offset business strategy

In the wake of spurting anti-China measures by America and the West in the last few weeks, Politburo of the Chinese Communist Party (CCP) set in motion offset business strategy that was unanimously applauded and adapted in the plenary session of  the National People-Congress recently. Here are five major goals set:

1.  Stepping-up of home grown technology, which was originally implemented in Huawei that made it the number one in 5G telecommunication. An investment programme is sketched with 10% resources earmarked for 2021 and 7% thereafter for successive four years ending on 2025. The central focus is to bring Chinese owned and Chinese led technology to surpass the techno manufacturing of USA and EU Combine

2. Gradually reduce low-tech exports and incrementally increase high-tech portion of manufacturing for export such that demand and supply is matched and no excess or shortage of Chinese goods experienced in the global market.  This offset business strategy has two phases: one consolidation phase that seeks to preserve and promote present capacity utilization in the production line. Second phase is to move upscale and implement solutions to produce high tech items

3. Self-reliance is the third goal that seeks to prioritize the key core technology items in quantum sciences including computers, Artificial intelligence, Bio technology and the production of semiconductors of 3 Nanometre chips. Once again a two-step approach is planned: firstly using most of the effort to bring out hybrid techy items with both civilian and military applications. Secondly disruptive technology would be give its pride of place

4. Next in agenda is self-sufficiency in techno inputs. Research & development grants are to be given to vital tech companies in order to make technological breakthrough with two main goals. One is to reduce dependence of techno inputs from USA, EU and Taiwan. Followed by this the second goal is to make Chinese companies compete with international rivals in their respective fields of high-tech

5. Last goal in the offset business strategy is the real dragon. Shifting emphasis of tech-manufacturing more towards domestic market and curtail foreign trade. A huge population base of 1.5 Billion people and ticking, this shift as it materializes would be the next apple cart that could demolish industrial production in America and the West by the forecast period of 2025!

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist

 

Business in the crosshairs, due to US - China confrontation

Since the introduction of economic reforms in 1978 by Deng Xiaoping, China had unbroken high growth registered between 1979 till 1989, a forty years period unrivalled in history. The rise of China was initially welcome, but the West later turned antagonistic towards China, led and prodded by USA. This got global businesses snared into the crosshairs of both America and China.

China was the much favoured nations since the implementation of economic reform that offered a package deal consisting of cheap labour, availability of natural resources, low tax regime, newly built infra-structure and the business policy of open door that welcome western companies while guaranteeing investment protection,  government support and conducive environment. A plethora of businesses moved into China in several fields including electronics, consumer products, automotive vehicles, pharmaceutical items and many others.

As China has risen as major power as Barrack Obama pointed out the attitude of western powers led by USA changed. Cooperation was thrown out of window and confrontation was opted as strategic option. Companies were caught off-guard and now have got to disentangle from the grip of power-pay between rising China and fading West. Unless common sense prevails it is businesses and their customers would suffer. A compromise business policy must be etched out with the following parameters:

1. It must be made clear that confrontation is not in the interest of both China & the West. Both parties must work hard to bring about a conducive trade & investment environment where mutual benefit takes precedence

2. A de-coupling of conflicting areas and cooperating areas must be in place so that one does not affect the other 

3. The West must be prepared to accept China as a major economic powerhouse and welcome its growth and prosperity wholeheartedly

4. Absolutely there is no question as to who is number one who is number two and so forth. Both parties must treat the other not as an adversary but as a partner of equal footing

5. Business manoeuvre of “one-upmanship” by the West is not going to work with giants like China that has equal if not higher economic muscle than America and the West put together. Moreover, China has already harnessed the concept of asymmetrical warfare in business competition

6. Instead of hectoring over China on “rule based international order” the West is well advised to opt for “consensus based international order” that includes business competition, supply chain and fair practices. 

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist

 

 

 

China business strategy 2021 spotlights surprise shift

Addressing the plenary session of National People’s Congress on March 18, Premier Li Keqiang heralded surprise shift in the way China is going to implement her business strategy for 2021 onward for five year period ending 2025. 

Firstly, it is the pruning of the GDP growth. In halycon days in the last four decades beginning 1979 till 2019, China averaged 9.5 % growth as indicated by the World Bank. Due mainly to Covid-19, the growth registered in 2020 plummeted to a mere 2.3% of GDP. Even though IMF expects China to rebounce to 8.1%, the Premiere sounded conservative while informing the 3000 delegates of the highest national assembly, that he expects the economy to grow 6%.

This is startling because the IMF is much more cautious than any other institutions in predicting economic growth. The Premiere went on “The target is not set on stone; it intends to guide expectations neither low nor high. The target should be fully adapted with the possibilities and conditions of what we can accomplish in this year (2021) and years after”

Speaking further Li Keqiang warned “We must avert wild swings in economic progress because it will de-anchor market expectations. A growth too fast may not be a steady one. What we need is a steady pace that sustains China’s development for the long run.”

Adding a punch line the Premiere gave assurance to the domestic audience on one hand and veiled threat to western nations that seek to de-stabilize China on the other by declaring “What we hope for China as a big economy is sustained and sound growth in long term” 

Sounds familiar? Yes indeed it was Sun Tzu who said, “Engage people with what they expect; it is what they are able to discern and confirms their projections. It settles them into predictable patterns of response, occupying their minds while you await for the extraordinary moment- that which they cannot anticipate”

China plays the long game with USA and EU to say the least!

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist

 

Chip war: How China turns adversity to opportunity?

Cold war was never a declared one between USA and then USSR. Now we have another war that is, Chip war between America and China. First salvo was fired by America banning Huawei getting chips from American manufacturers and their associates. As chip war intensified China responded in style taking advice from sun Tzu:

Says the grand strategist, Sun Tzu succinctly in two sentences:

1.“By altering his arrangements and changing his plans, he keeps the enemy without definite knowledge”

2. Let your plans be dark and impregnableas night, and when you move, fall like a thunderbolt”

Here is how China turning chip war from adversity to opportunity by the judicious use of business manoeuvre:

1. China produced only about 30% of chips domestically and imported around 70% from outside mainly from America and TSMC (Taiwan Semiconductor Manufacturing Company) which is under US control. China is upping her investment in local chip manufacturer SMIC (Semiconductor Manufacturing International Corporation) to meet the challenge. The exact amount invested is shrouded in mystery.

2. Moreover, China expanded her investment slowly and steadily in core technology for the last decade under the nose of America. For example, Artificial Intelligence and Quantum Computing are two areas China has upper hand even though China continues its state of denial of her stellar progress.

3. It came as a big blow when Huawei unveiled 5G technology before America did. Huawei is now on par with Samsung which produces semiconductors for her own mobile sector and for supply to number of countries including China. 

4. The so called back door transaction between Huawei and Samsung was never made official and techno partnership between the two giants has gone mostly un-noticed even by the watchful eyes of American establishment.

5. Unsurprisingly, Artificial Intelligence used by Chinese manufacturers in cloud computing shows their technical excellence, more than anything else.

The big question now is how the chip war can sustain itself when China is ready and America is not!

 

Cheers! 

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist

 

Why co-opetition business strategy succeeds?

 Big time companies tend to lose a lot in head long business competition. This is especially true in tech firms that leverage innovation and pharma companies that are under pressure to produce urgent medical solution. One way to optimize result is to combine features of competition with cooperation. The resulting mixture is known as co-opetition. 

Since 1997 when Adam M. Brandenburger and Barry Nalebuff co-authored the path finding book “Co-Opetition”, the idea of using a combination of competition and cooperation as business strategy became vogue and many companies got into the wagon of co-opetition.

The notion of collaborating with like-minded parties for a common goal is not something new. Many companies get together when they sense a danger from a new entrant to the market who becomes a major threat to their own survival. Forgetting about whether one is weak or strong all competing companies join in an alliance as equal partners to manage their business competition!

Co-opetition on the other hand takes this alliance to the next level. Here the central idea is to install a sound networking relationship. Major goals include:

a) Networking of common resources in the form of R&D, human resources that are trained and skilled, physical assets such as production line, and availability of requisite finance

b) Expansion of business of the existing products

c) Exploration of new market opportunities for forthcoming products

d) Product innovation in-house

e) Setting industry standards and regulations, such that alliance partners stand to gain both in turnover and profits in their exclusive zone and at the same time barring newcomers entering into this no-go area.

f) To ensure safe conduct by all parties in the alliance a business agreement is drawn stipulating responsibility, accountability and liability of each participant.

Recent example of Covid- 19 vaccine manufactured by the alliance of Pfizer and BioNtech illustrates how co-opetition succeeds!

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist

 

Never let them see you sweat, a mantra for business warfare

 Originally coined by Advertisement Guru, Phil Scott and used in Gillette’s antiperspirant deodorant “Dry Idea “in 1984, “never let them see you sweat”  has stuck the business world as a motivator slogan. At its best it turned out to be a great mantra in business warfare.

The gist of the arguments for using this mantra was better explained by none other than Go West Music Group in one of their greatest number “never let them see you sweat”. Here are the highlights of the song presented to you seasoned and savoured for its use in business warfare:

1. You take a chance, enter into business venture and gotta a product to sell. It could not float. Truly a big mistake on your part. Keep your cool amidst the chaos following this failure as things fall apart around you and your team. You must keep it inside never let others come to know that it has brought such a big calamity 

2. Competitors out there, are baying for your blood. They are out to get you as you are down. It is ok if you are down one day and up on another day. But the fact of the matter is opponents want you to be down, discouraged and finally done for ever. Put differently, they are out to get you to run towards the exit door to be out of their privileged market ground

3. Pressure inside your company is rising, tension is up as talk of resignations galore. You get double whammy as pressure from outside is also rising: creditors of materials and finance are asking you to show cause lest they recall loans or cease supply

4.  To top it all, opponents, being the sharks they are, smell blood now. On the one hand they are testing your last piece of patience. On the other, they are driving you crazy first and mad next. At this moment their objective is to sow an element of doubt within you that can grow as a gigantic tree standing between your aspiration and your situation.

5. Your business strategist counsels you: chill it; keep cool; hold your control. Try it out once again with changes in the features of the product giving prospective customers unique value that was missing right now in the market.

If you can weather the storm and keep your conviction intact sooner or later you will be sailing over calm waters. Opponents disappear; staff gets the boost and you have finally defeated your enemies as you are now in the threshold of introducing an excellent product to the market, which craves for the one you have!

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist

 

 

Transforming defeat to victory

In business warfare even large companies occasionally face a probable defeat of sort, where it has to snatch some form of victory from the jaws of defeat. Seasoned business strategist can easily spot “the about to fall operations” as he has business strategy in the palm of his hand. Here are three takeaways on the subject of transforming defeat to victory:

1. Before venturing into intense business competition targeting a strong competitor a company must have full spectrum of defensive and offensive capabilities. It is hard to predict the outcome of business warfare involving two equally powerful contenders. Neither of the competitors could easily defeat the other convincingly in the short term. Put it simply it is drawn out hostilities as we witness in the Cola Wars between Pepsi and Coca-Cola.

2. At this point what would be at core is how to structure the front line offence and backend defensive measures. Front line marketers must be geared to learn the possible counter moves of the opponent well before the latter operationalize it. Estimating capability of the opponent along with guestimating his business manoeuvres is the key to unravel the possible outcome. Supermarket bosses have this knack in identifying purchase and stocking patterns of opponents and are ready to face any eventuality. Walmart does this deliciously.

3. Avoiding mismatch is the third and significant countermove to turn possible defeat to victory. The big question here is where to find mismatch taking place and how to prioritize it. Unsurprisingly, board of directors of companies on the verge of defeat take marketers to task for their failures. But the real cause lies elsewhere. In essence the mismatch takes place at the back end where capabilities are screwed up. A noted failure is Dell Computer which won several sales contract but was unable to execute these as stocks and spares were not readily available to meet the demand!

 

Cheers!           

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist

How Michael Franzese practises Sun Tzu?

 It is convincing! When grand master of strategy Sun Tzu is right out there you can just cherry-pick a leaf from his celebrated work and practise it to perfection. This is what Michael Franzese ex-Caporegime of Colombo Family did in his brilliant career. Read more: 

Sun Tzu Says: “All warfare is based on deception. When we are able to attack, we must seem unable; when using forces we must appear inactive; when we are near we must make the enemy believe we are far away; when far away, we must make him believe we are near.”   

Michael Franzese reflecting upon the above theory chalks out the following gems of advice on business strategy: 

1.  Sometimes you may be the smartest person in the room, and you don’t want anybody to know that; keep quiet and pretend that you don’t know anything. Let them think that they are smarter than you. 

2. In other times, when you are not the smartest person in the room, and you want people to think that you are smart, then quietly prod them to reinforce the false view that you are indeed strong.

3. In both these occasions you have to figure out a way where at the end, you come top on the situation still giving the impression to others that, the final settlement is a win-win for them!

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist

 

Business warfare: breaking fear barrier

 Survival of the fittest is often reflected in business warfare where not necessarily the strongest but the wiliest has its day. How this is accomplished? Answer is simple: break the fear barrier!

When you see fire raging in part of your home first thing that you get is panic. Similarly, when you float a new business first thing you sense is the intense heat coming out from business warfare surrounding your sector. You get panicky and press all the buttons to get over it. Do not panic! Business warfare is the order of the day everywhere in business world.

Fear barrier is a two sided knife. One side cautions to take care. This area you get a laundry list of “don’ts”. If you get drowned in that list you will never see sunlight. On the contrary other side which is calamitous though in intent allows you to take measured responses of “do’s”. Once you get the do’s and don’ts you throw out of the windows the don’ts that serves no purposes and keep a safe list of do’s that serves you.

Balancing pragmatism with idealism is a key to break fear barrier. In fact seeking balance is the best way to understand business warfare and get the best out of it. For example sports foot wear giants like Adidas and Puma who were engaged in mutually harmful competition by using celebrities to showcase their products finally settled down to a code of ethics that forbade any seller to commission celebrities to wear its footwear in international event such as Olympics. This code is known as “Pele Pact”.

Analysing the best case and worst case scenarios often helps you to get the via media approach that dispels your fear syndrome and replaces with confidence and build up the competence to face any given situation where fear grips you. A word caution in this regards is that you must not let your imagination go wild. Common-sense must prevail along barring you taking extreme visualizations such as surrender to the opponent or quitting the market place as temporary measure.

Practising of breaking fear barrier must always begin with your taking the weakest among the pack so that you can learn to how to absorb shocks and blows. As you progress next target is the medium sized opponent where you can practice deflection of blows and counter punches. This increase your staying power. Soft drink manufacturer Schweppes did this for a long time from its beginning in 1783 until 1969 when it was merged with Cadbury!

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist

 

 

Ten rules of business competition

 Whether you already have a running business or propose to open one you’d better get a hang on the “Ten Rules of Business Competition”

1.  Put the money where the mouth is: Do not be fooled by con artists and fake analysts who recommend you something as a great business idea which ultimately fails in the market. You must do your own homework before venturing into business

2. Initial sales performance does not make success story: Look at the adage “one swallow doesn't make a summer”. Unless you can get continuous sales growth in arithmetical progression do not believe an isolated event as foreboding business success

3. Profit is vital but that is one part of the equation: If you go solely by profit criteria you’d be disappointed bitterly. What is important is to understand the concept of “staying in the business throughout”. Therefore initial profit or loss does not matter in the long run

4. Product excellence is the ultimate key: Unless you have a unique value proposition in terms of product and its delivery to customers in a winning manner never get into a business in the first place

5. Build the right team: Having built a product that can work in the market next item in the agenda is to identify and select the right personnel to create and deliver the value to the marketplace. Everything depends on the team spirit rather than individual excellence

6. Be ready to make tough choices: Faint hearted cannot climb tall mountains. Each circumstances you face is different in terms of risks and rewards. Equally important is whether the circumstance pits you in conflict with adversary or collaboration with friend. You have to make the right choice and move forward

7. Marketing excellence is long game: Rome was not built in one day. Indeed it takes several months or years to scale the heights in your selected market area. Patience is therefore a virtue you must possess

8. Float between flexibility and rigidness:  In implementing business plans in production or marketing you must not take a fixed position. At times you have to be flexible regarding sales commission or tweaking features of product to an important customer bringing a bulk order

9. Market dominance is one dimensional: Monopolist can either dominate market or price not both, says economic theory. In practice, you have to choose either getting big market share or high price for product. If you aim for both ways you will be washed out by rising waves of fearful competition.

10. Out of the box: Finally unless you come out with creative thinking and seize up every circumstance and opportunity your days in the market place is numbered.

 

Cheers! 

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist