The battle for China’s smart grid

5/21/2010 - A team of Kellogg students representing IBM recently won a public “war game” over the battle to build China’s smart grid.

With 30-plus executives from IBM, GE Energy, Siemens, Hewlett-Packard and others looking on, Kellogg students and those from three other leading business schools participated in a war game to stress-test the global strategies of firms competing to build China’s $100 billion smart grid — only to encounter obstacles that had nothing to do with their companies’ technological prowess and everything to do with how they work with and within China.

The other teams were from MIT’s Sloan School of Management (representing Cisco), the Wharton School (representing GE Energy), and the Yale School of Management (representing Siemens). The Kellogg team took home a $5,000 prize from Fuld & Company, a leading competitive intelligence firm that organized the event in Cambridge, Mass.

“We’ve gained long-term experience in learning teamwork and how to think of competitors and (one’s) company from a new perspective,” Kellogg team member Daniel Kamerling ’10 said. “We also saw that IBM’s services align well with China’s needs. We saw how we could build up IBM’s brand awareness at the ground level with the State Grid Corp. in China.”

In addition to Kamerling, the Kellogg team included Peter Adams ’10, Milind Kopikare ’11, Marko Ivanov ’10, Elana Lian ’10, Hrug DerManuelian ’11, Edwin Jeu ’11, Fan Zhang ’11, Kun Zhang ’10 and James X Chen ’10.

Through rapid-fire arguments, interrogation by an expert panel of judges, and questions from corporate observers, “The Battle for China’s Smart Grid” revealed obstacles that many industry observers admitted their companies must overcome if they are to win a piece of the $10 billion-per-year funding China has offered over the next decade.

The Kellogg team, as well as the competing teams, worked to identify how the firms they represented could add enough value to the smart-grid initiative in China to earn profits for their companies. They recognized the need to enter into strong partnerships with Chinese and possibly other Western firms to bring a successful package of products and services to the table.

Industry observers included Kraft Foods, Starbucks, Cigna, RIM (Blackberry), Microsoft, and Xstrata that either do business in China or wanted to learn more about war gaming, a structured process that enables participants to determine strategies and options in competitive business situations.