China is now home to many of the world’s largest and most dynamic private companies. But apart from a few exceptions such as Alibaba’s Jack Ma, little is known outside China about the intrepid entrepreneurs who built these business empires, often against astonishing odds. Professor Peter Cappelli at The Wharton School, University of Pennsylvania and author of Fortune Makers: The Leaders Creating China’s Great Global Companies, is trying to change that.
Over the past five years, the business model of China’s clothing industry has been unraveling. For decades, China’s vast apparel industry competed mainly on price. But with labor, land and raw materials costs rising, environmental regulations tightening and competition becoming ever fiercer, even many of China’s best-known brands have struggled. There has been one exception: HLA. The Jiangsu Province-based menswear label has grown stronger even as competitors shuttered hundreds of outlets. In this interview, Li Lode, Professor of Operations Management at CKGSB and Professor Emeritus at Yale University, explains how HLA’s success has been made possible by smart strategic decisions.