The Aim Is Removal, Not Overtaking
Management consultant Ram Charan describes China’s industrial approach as the “90% Model” and sets out the mechanism in three steps: building capacity to meet roughly 90 per cent of global demand in a targeted sector, holding the currency undervalued so exports become unbeatable on price, and flooding the market with subsidised product.
The story is usually read as a warning about a single country. The finding that matters sits in the nature of the mechanism: this is an elimination strategy rather than a competitive one. In ordinary competition you become better or cheaper; here surplus capacity is created deliberately and price is pushed to a level rivals cannot survive.
For a manufacturer anywhere outside that system, the consequence reduces to one sentence: price competition cannot be won in a sector this model targets — because the other side is not trying to make a profit.
How the Mechanism Works
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- Capacity is built beyond demand
- Price pressure comes from currency
- Exports are subsidised
- The aim is removal, not overtaking
By Charan’s account the model is built in four steps.
Capacity is built beyond demand
Production capacity covering nearly all global demand in the targeted sector is constructed. Excess capacity is not an error but the instrument itself.
Price pressure comes from currency
Holding the currency undervalued makes the same product automatically cheaper internationally. A price gap forms even without a productivity gap.
Exports are subsidised
State-supported exporting makes pricing below cost sustainable. What is unsustainable for the competitor is sustainable for the model.
The aim is removal, not overtaking
According to Charan the objective is destroying competitors rather than outcompeting them. Once rivals close, capacity sits in one place and pricing is freed.
What This Changes
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- “If I get more efficient I can compete”
- “If I cut prices I keep the demand”
- “Cheap is permanent”
- The timescale is twenty years
Three standard competitive assumptions stop holding.
“If I get more efficient I can compete”
A productivity difference does not close a gap created by currency and subsidy. A manufacturer becoming ten per cent more efficient still cannot bridge it.
“If I cut prices I keep the demand”
Entering a price war means meeting an opponent who is not trying to profit on their own ground. Who remains at the end is decided by endurance rather than price.
“Cheap is permanent”
By the model’s own logic the low price is a phase. Prices are expected to recover once competitors withdraw — at which point the buyer has no alternative left.
The timescale is twenty years
This strategy is not today’s decision; it is the outcome of a structure built two decades ago. A response to it cannot be a single quarter’s move.
Who This Affects, and How
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- Those who gain
- Those who lose
- Those largely unaffected
- The indirect chain
Exposure follows which axis a business competes on.
Those who gain
Manufacturers positioned on something other than price. Delivery speed, customisation, service, certification and proximity sit outside this model’s reach. Producers able to handle small batches and shifting demand are also relatively protected.
Those who lose
Businesses producing standard goods at scale and competing on price. Cost reduction buys time here without changing the outcome. Single-product manufacturers are the most fragile.
Those largely unaffected
Local service businesses and work that cannot be relocated are untouched directly. Where their customers sit in an affected industrial region, however, they feel it through demand.
The indirect chain
Cheap imports arrive, the local producer cuts prices, margin narrows, investment stops, quality and delivery capability weaken and the non-price advantage disappears too. The decision to compete on price consumes the ability to compete on anything else.
What to Do About It
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- Write down which axis you compete on
- Lead with small batches and fast delivery
- Turn customisation into a product
- Do not depend on one market or one product
All four can start this quarter and all four strengthen the non-price axis.
Write down which axis you compete on
Why do customers choose you: price, delivery time, customisation, service? If the answer is price and your sector is targeted, the position needs changing.
Lead with small batches and fast delivery
Product arriving from a distant source carries shipping time and a minimum order quantity. Short lead times and small batches are the sellable expression of geographic proximity.
Turn customisation into a product
Standard goods compete on price; modified goods do not. Systematising dimension, material, colour and packaging variations reduces price pressure directly.
Do not depend on one market or one product
The model advances sector by sector. A business with a broad range and spread markets is not left defenceless when one sector is targeted.
The Digital Side
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- An unshown difference does not count
- Proximity is an argument
- Certification is a price defence
- Foreign buyers search here
A non-price advantage that cannot be seen gets reduced to a price comparison.
An unshown difference does not count
If your lead time is short, you can customise and your service is strong, the buyer knows this only if it is written. Otherwise they hold only price — and there you lose.
Proximity is an argument
Being in the same region means fast samples, on-site meetings and immediate response when something goes wrong. Unstated on the page, these concrete benefits collapse into a vague claim about local production.
Certification is a price defence
Documentation and test results offer an assurance the cheap alternative does not carry. Placed where they can be seen, they move the comparison from price to substance. It is the item we emphasise most in export and e-commerce consulting.
Foreign buyers search here
A buyer seeking an alternative supplier looks online first. A manufacturer without pages in their language falls outside that search entirely.
A Solid Digital Foundation
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- Variants need defining separately
- Minimum order quantity belongs in writing
- Lead time is product information
- The foundation is built once
The most common error among manufacturers who can customise is hiding it on a single product page.
Variants need defining separately
When dimension, material, colour and capacity options are each defined in product data, the buyer searching for that specification reaches you; described collectively on one page, you appear for none of them. How product variants should be defined is explained in the Google Search Central documentation. Every option you can supply but have not defined reads as an option you cannot supply.
Minimum order quantity belongs in writing
If small batches are your advantage, the figure has to appear. Unable to find it, buyers assume a large minimum and move on.
Lead time is product information
Stating delivery time alongside price makes the real difference from a distant source visible. Unstated, that difference never enters the calculation.
The foundation is built once
Variant structure, certification display and delivery information, once defined, apply to every new product. We cover that build in our approach to digital consulting.
Frequently Asked Questions
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By the account given, the strategy advances by selecting sectors. An area outside the target today can enter it tomorrow, which makes single-product dependence risky.
It can hold market share short term. Entering a price war with an opponent not seeking profit, however, turns into a test of endurance.
They can provide partial and temporary protection. The durable answer runs through moving the position onto a non-price axis.
Compete on flexibility rather than scale: small batches, fast delivery, customisation. These are where large capacity is naturally weak.
The model is one consultant’s analysis of a contested subject and other views exist. The purpose here is a positioning decision rather than a policy judgement.
Months, because it involves product, process and customer base. The decision therefore belongs before price pressure is felt.
Source: Ram Charan, “The 90% Model” (Ideapress Publishing, 2026), publisher material and the author’s statements; assessment published by Fast Company Türkiye. For information purposes.