Companies & Industries

A Pan-Asian Strategy Can Hurt Your Business


Sweeping generalities about Asia make for a "template mentality" that doesn't help an organization grow and succeed

Posted on Harvard Business Review: March 15, 2010 4:17 PM

Does a Pan-Asian identity really exist? Outside of Asia, this region is often talked about in sweeping terms. While it is only human nature to make generalizations about other cultures, the danger is that in business such thinking creates practical difficulties as well as lost opportunities.

The operational problem of adopting a "Pan-Asian" mindset is that it leads to what I called in an earlier post a "template mentality" within Asia. But, as many readers commented, we need to be circumspect about using the "what works in Japan will also work in Korea" modus operandi when critical cross-national differences exist. Moreover, in some individual Asian countries, internal diversity is still inherently high—India, China, and Indonesia are like continents in terms of how many different ethnic groups, languages, and regional preferences each possesses. For instance, China's beer market is the largest in the world but is so fragmented that the major breweries like Yanjing and Tsingtao have to use a multi-regional brand strategy to appeal to each local market. The message is clear; there is no "One Asia."

But global companies may reap substantial benefits by embracing Asia's diversity. Because countries may differ in how they respond to products and brands, this variation creates chances for companies to gain a new edge over its rival firms. Yahoo's continued dominance over Google in Japan is a good example of how the former's devotion to that country has solidified its position despite its loss of share in the U.S. or elsewhere in Asia. Similar success stories can be found for Audi in China and LG in India where both have bested the competition even though they lag elsewhere.

To safeguard against committing a Pan-Asian identity mistake, I urge global companies to see if their ideas about Asia or an Asian country hold up to the following test:

1. Are your ideas about Asia outdated?

Many countries in Asia have experienced significant economic, political, and social transformation in the last few decades. Despite that we sometimes rely on old or "classic" sources of information to make judgments about the region or countries, especially their culture. In particular, the dynamism of places like China, India, and Korea calls for frequent updates to confirm the sustainability of those old assumptions. This problem can be compounded when there is a lack of information on contemporary local culture that is translated into other languages.

2. Are you looking at only one country as an example?

Some Asian images are particular to one country and yet we can commit a serious offense if we project it to other ones even if they are positive. In the west, for a very long time Japan was a focal point of all things Asian whereas now it is China. Both countries cast such a big shadow that the identity of smaller countries can be easily overlooked.

3. Are your plans appropriate for only one segment?

The mistaken Pan-Asian identity is formed when global managers only get limited exposure to a country. For instance, in business centers like Mumbai, Shanghai, Tokyo, and Seoul, the local people who work there are the best educated and the most internationally minded in their respective societies. To extrapolate from them to the whole population or across Asian countries would be fraught with error. Thus, managers new to a culture should try to interact with a greater spectrum of people to get a better grasp of the country.

4. Are you only considering the group, not the individual?

Many Asian identities stem from long-standing ideological or religious values. Some paternalistic governments and companies preach the need to follow many of these ideals. At the same time, many of these countries are now democracies where individuals have the freedom to decide how they will really behave. Hence, people in many countries in Asia have two levels of identities: one that they believe in as a group and another that they actually practice as an individual. Foreign companies need to differentiate between the two.

5. Are you passing unfair judgment?

Even in business there is hero worship or villain bashing. Heroes and villains can come in the shape of a key industry, company, or person. Outside of Asia, they may symbolize, sometimes unfairly, what is good or bad about a country or the whole region. Toyota's recent travails, instead of being simply viewed as one company's problem, can therefore be perceived as being more profound and endemic to the rest of Japan or the entire region. This kind of identity may also be framed by personalities such as "Asian tycoons" who often appear in the news.

If you responded "yes" to many of these questions, it should raise a red flag that a false "Pan-Asian" identity is being formed and you should consider revising your thinking and approach to countries in this region. What other myths about Asia are preventing you from being most effective in this region?


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