The Quest for Defendable Scale in China
Scale is one of the most important advantages for overcoming China's pricing pressures and rising costs. Size is also crucial in negotiations with smaller retailers and distributors. Defendable scale—which we believe is necessary to win in China—depends on securing strong competitive positions (measured by relative market share) in large and profitable categories. In this report, the authors discuss how companies can adapt their business models to China's unique markets, target the new segment of value-seeking middle class consumers, and, above all, create the right kind of defendable scale economies for lasting success.
PDFHubert Hsu is a senior partner and managing director in the Hong Kong office of The Boston Consulting Group and the leader of BCG’s Consumer practice in Asia.
Vivian Hui is a project leader in the firm’s Hong Kong office.
Waldemar Jap is a partner and managing director in the firm’s Hong Kong office.
Carol Liao is a partner and managing director in BCG’s Hong Kong office and the head of the firm’s Center for Consumer Insight in Asia.
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