Model-based Competition

May 2008 | By José Almagro. Executive Chairman. Bayes Inference S.A. and Professor at IE Business School

Companies that adopt a modelling strategy to anticipate, identify and satisfy customersâ?? requirements will not only obtain basic competitive advantages over companies that do not, they will end up pushing them out of the market.

My theory goes like this: companies that adopt a modelling strategy to anticipate, identify and satisfy customersâ?? requirements will not only obtain basic competitive advantages over companies that do not, they will actually push them out of the market.

The modelling strategy is not just another strategy in a repertoire of feasible options, but rather a controlling strategy. This dominance is due to two coordinates. Firstly, given a certain set of activities, the use of models produces optimum combinations and is therefore the most effective way of organizing said set of activities.

Secondly, companies equipped with this strategy are more innovative and reduce the costs associated with misguided innovations. In short, operational and economic efficiency, early diagnosis of market, customer and policy trends, and innovative drive constitute the three key factors that turn a modelling strategy into a controlling strategy.

Where are the Chinese executives?

May 2008 | By Elena Escagedo, Director of Open Enrolment Programs at IE Business School, Executive Education

Give me the name of a high-level Chinese business executive. Canâ??t think of one? And who is the owner of this Asian superpowerâ??s largest business fortune? Donâ??t know that either? Well, neither does anyone else, actually: so whatâ??s going on in Beijing?

China has been growing at double-digit rates for several years now. India is growing somewhat slower but also shows spectacular development. China is currently the fourth largest economy in the world and if the dollar continues to fall, it will quite possibly be the leading economy on the planet in a short period of time. Moreover, if this trend of growth in China and India continues, both economies will represent around 25% of the world GDP by the year 2025.

Although this information is well known, there is one question that needs to be asked about these countries: why are there Indian executives in important executive positions in some 30 companies on the Fortune 500 and yet there are no Chinese executives on the list? Paradigmatic cases include the Pepsico CEO (Indra Nooyi, a woman) and that of Vodafone (Arun Sarin). However, we can go even further: why, according to the Forbes magazine, are entrepreneurs of Indian origin among the ten richest people in the world while there are no Chinese entrepreneurs? The only entrepreneur of Chinese origin in the ranking of the 50 richest people in the world (in tenth place) is Li Ka Shing, with his Cheung Kong Holdings conglomerate, whose flagship is Hutchinson Wampoa, world leader in seaport management. Li Ka Shing was born in Guangdong, China in 1928 but has developed his career in Hong Kong since the 1950s. Meanwhile, Forbes places four Indian entrepreneurs (Lakshmi Mittal, Mukesh Ambani, Anil Ambani and Kushal Pal Singh) in fourth, fifth, sixth and eighth position of the 50 richest people in the world.

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Second term of office and foreign affairs

May 2008 | By Leopoldo Calvo-Sotelo, Director of Master in International Relations at IE School of Arts and Humanities

International relations are the Achillesâ?? heel of many a president when they first come to power, and their first reaction is to place it in the hands of a professional. But everything changes when it comes to re-election.

North American political commentators have coined the term “second term blues” to refer to the problems that usually affect the presidents of the United States during their second term of office. Often it is said that they are a combination of tiredness and arrogance that comes from power exercised over a long time. The experience of Spanish democracy has still not given rise to this type of problem, but certain trends in second terms of office can be identified in the field of international relations. It is particularly interesting to analyse successive appointments to the post of minister of foreign affairs.

Ministers of foreign affairs have always enjoyed special prestige in democracies. In North America, the world fame of the secretary of state has, on exceptional occasions, rivalled that of the president himself. This occurred with Henry Kissinger during the last stage of Nixon´s office and during the presidency of Gerald Ford. Whatever the case, only the secretaries of state (and not all of them) appear next to the presidents in the photos and memories of an era. For example, the presidencies of Truman and Eisenhower are inseparable from the figures of Dean Acheson and John Foster Dulles, respectively.