Cumi India's Global Strategy: The China Puzzle
by S. Ramnarayan, Charles Dhanaraj, Krithiga Sankaran
Carborundum Universal Murugappa International (CUMI) was a leading abrasives manufacturing company based in India with global operations in Russia, South Africa and China. In the global abrasives business, China held 50 per cent of the raw materials for the industry. China was also the largest market for abrasives worldwide and was expected to contribute to one third of the global demand for abrasives. CUMI had the vision to become a global leader in the abrasives industry within 10 years. It had successfully expanded operations in Russia and South Africa, where it was seen more as a partner than a conqueror in its acquisition strategy. In 2006, the company entered China through a joint venture with a Chinese state company but subsequently bought out the partner. However, the company was facing several problems with its stand-alone operation there, especially in terms of maintaining
its workforce and hiring local managers. It was clear that winning market share in China was necessary, but the complexity of the Chinese market had proven to be a challenge. The managing director had to present a strategy for working successfully in China to the board.
Learning Objectives:
This case is appropriate for an MBA or an executive MBA class in courses on global strategy and strategic management. It creates a hands-on experience of developing international strategy for a company based on a systematic analysis of the industry structure, competitive advantage and country factors. Students will develop an understanding of the commonalities and the differences between India and China and conduct performance analysis of the international portfolio of a company to diagnose its specific strengths and weaknesses in the international domain.
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