The authors, all of whom are management mavens from the Boston Consulting Group, have coined a neologism for the unique features they see to how business is done globally now and in the future, and propose that we understand the phenomenon of globality, which, as the subtitle explains, is much more than mere globalisation.
Sirkin, Hemerling and Bhattacharya cleave the set of players into two sets, the incumbents (established MNC corporations) and the challengers, a set of companies based in the rapidly developing economies (BRICs and eastern Europe, Mexico, Turkey), who by using innovative local practices are threatening the market share of established players in a number of nascent and growing industries. Globality: Competing With Everyone From Everywhere For Everything is mostly the story of some of these challengers, Johnson Electric , BYD, Goodbaby, Embraer, some Tata companies, Wipro, M&M, and Bharat Forge, to name a few.
One of the companies which typifies the "challenger" label is Johnson Electric, a Chinese company whose name was deliberately anglicized to make it competitive in the west. Johnson Electric was started in 1959 by Wang Seng Liang in Hong Kong to make the tiny electric motors that power toys. It is now the world No. 1 in motion actuators, which are used in a variety of functions. The book chronicles several episodes in the history of Johnson Electric to demonstrate how nimble and aggressive companies can grow to world stature by a mixture of local knowledge, leveraging low cost labour, and appropriate inorganic growth. Johnson Electric now employs about 45,000 people worldwide, and is located in the Pearl River delta manufacturing cluster in China. It has more than 80 suppliers and ancillaries located around it. This phenomenon of a "challenger" company spawning an entire industry has been noted by the authors as one of the characteristics of the type of growth Globality brings with itself.
Entrepreneurs in the developing countries can learn a lot from Goodbaby's trajectory. Goodbaby, one of the world's largest makers of baby goods, operates over 1,600 retail outlets all over China, and has a dedicated R&D facility. The story of its humble origins and eventual triumph make for interesting reading.
Song Zhenghuan, a mathematics teacher and principal of a middle school in the Shanghai suburb of Kunshan, started Goodbaby in response to a request from teachers in his school, who pooled their meager savings together. In the early 1980s the company was on the verge of bankruptcy, but was saved in the nick of time by an order from the Government manufacturer for strollers. Song pledged his entire productive capacity to servicing his new customer. This proved a canny decision. Song soon found an innovation to the original design he was assembling, and decided to patent his improvement. This brought much needed capital into the enterprise, and Song built with it, among other things, a gate to his factory, because he felt "A real factory has a gate". Within a year, Song came up with another invention, a stroller that could be used as a car seat. The product was a hit, and Goodbaby was truly launched towards its present scale. Goodbaby now has one of the largest distribution networks , and offers a market for a huge cluster of ancillary suppliers.
Another "challenger" company that the authors love to talk about is Embraer. Brazil's regional aircraft manufacturer Embraer has achieved great commercial success. Embraer was boosted by Government interest in its origins and was set up as a state owned enterprise in 1969. In December 1994 the company was privatised, with the Brazilian government retaining a 44.6 % share. In 1995, due to a bold gamble taken when the company was in dire financial shape, the company threw all its R&D experience into building a 45-seat regional jet. This gamble paid off rich dividends and Embraer was launched to a comfortable market position. The next challenge was to make a 100-seater, skating perilously close to the turf inhabited by Boeing and Airbus. The resulting E-170 was a resounding success, and now the company has a large order backlog, having helped transform the industry.
As an example of a company going global through the inorganic growth route, the authors offer up to us the instance of Bharat Forge. India's Bharat Forge was founded in 1961 to serve the Indian automotive industry by forging a variety of components such as crankshafts, connecting rods, and axles. A sharp downturn in the Indian automotive industry in 1997 pointed out to senior management that its reliance on purely domestic demand was a serious strategic drawback. So, in 2001, Bharat Forge made a series of acquisitions of forging companies in the US, Germany, Sweden, and Scotland. This enabled the company to distribute its operations geographically and serve different markets. This strategy as obviously paid off, with the company boasting an EBITDA margin of 20 per cent while its industry peers get by with 10 to 15 per cent.
In the IT domain in India, Wipro Technologies has also been another firm to follow the acquisition route to penetrate distant markets, and incorporate different skill sets into a seamless global offering. In 2007, it purchased Infocrossing, a provider of outsourced IT services for 600 million dollars. By acquiring strategic assets Wipro has been able to offer complex services globally and maintain healthy margins while doing so.
The authors take us through detailed case histories of several companies they see as "challengers" to the existing world order. All these companies are marked by geographic dispersion, often sourcing resources from different geographies, and spending on R&D to promote innovation and customer satisfaction. They are all characterised by the low-cost labour condition, but have deployed this advantage in a variety of ingenious ways to achieve truly lower global costs without any loss of quality. These companies have often been shielded from competition by governments in their early stages, but once allowed to grow organically, have flourished to truly global status. And for emerging market fund managers, the short list of a hundred "challenger" companies is as good a guide to stock picks as any other I have seen.
The author works for Research Interface, a market research company. He has a Ph.D in Economics and advanced degrees in economics from University of Mumbai and New York University.
Book Reviews 
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The authors, all of whom are management mavens from the Boston Consulting Group, have coined a neologism for the unique features they see to how business is done globally now and in the future, and propose that we understand the phenomenon of globality, which, as the subtitle explains, is much more than mere globalisation. 
