Robotics & Automation News

Market trends and business perspectives

chinese wall

Finding a third way forward for China’s economy

chinese wall

By Edward Tse, CEO of Gao Feng 

China’s fast economic growth, its gradual but consistent transition from a planned economy toward a market economy, the emergence of highly intensive competition in the open sectors, the increasing prevalence of technology and the availability of angel investing and venture capital funds all contributed to the emergence of waves of entrepreneurship and innovation in China that the country had not seen before. 

In their search for growth strategies, these Chinese entrepreneurs were typically fast and agile. Some of them developed diversified conglomerates, and there were others that decided on a narrow focus, taking the core competence approach.

The results have been mixed. Interestingly, some of them, through trial and error, discovered a third way of strategy development. We call it “multiple jumping”. 

When these entrepreneurs see new opportunities evolving, even if they do not have all the capabilities to fully operate the new business, they decide if they should jump over or not.

So far, some of the companies that have jumped have been successful in latching onto the new business sector. Often, they will repeat the process when newer opportunities turn up.

When these companies jump, they try to fill their capability gaps either through their own efforts or by collaboration with other companies, or by using both approaches.

This multiple jumping approach to strategy is different from a conglomerate approach because, despite their involvement in multiple sectors, these companies generally keep their original heritage as their core.

On the other hand, multiple jumping clearly defies the core competence approach, because these companies are willing to enter new areas of business without having the expected core competences established.

So, this multiple jumping approach is another way to think about strategy beyond the conglomeration and core competence approaches. We call it “The Third Way”. It provides another way for companies to decide how they should develop their business strategies in a fast-growing, discontinuous operating environment abounding with fertile opportunities.

A prime example of a company that has successfully adopted this approach is Alibaba, which has interests in industries including healthcare, the media and consumer finance as well as its core e-commerce business. Coincidentally, US companies such as Amazon and Google have also grown through this approach.

As China’s operating environment continues to rapidly evolve, innovation and entrepreneurship are thriving. Companies are looking for even more inspiration for growth. Many entrepreneurs continue to look at the West, especially at the US, for inspiration in technology, management and investment models. Some are also examining Chinese historical philosophies for guidance.

Today, in addition to a growing number of consulting firms, business schools and training companies in China, many corporations have also set up their own “universities” or “academies”. Business executives, successful or not, are eager to share their experiences in running businesses and some have turned into modern philosophers.

This article first appeared on

Print Friendly, PDF & Email