BOSTON, MA--(Marketwire - March 6, 2008) - Companies from rapidly developing economies
(RDEs) are redefining the rules for local competition in their home
markets, thus putting the expansion plans of many global industry leaders
at risk, The Boston Consulting Group (BCG) warns in a new report on 50 of
the most impressive companies from RDEs. The report, titled "The BCG 50
Local Dynamos: How Dynamic RDE-Based Companies Are Mastering Their Home
Markets -- and What MNCs Need to Learn from Them," is being released today.
The list comprises 50 homegrown champions that are quickly conquering their
domestic markets through fierce competition and innovative business models
that defy traditional competitive advantages. The report outlines the
successful strategies that these companies have in common and the six key
success factors that are helping them win in these markets.
"Industry leaders need to learn from this new breed of rivals if they want
to win in their markets," urged David C. Michael, the report's coauthor and
a Beijing-based BCG senior partner. "They are increasingly finding that
deep pockets, solid patent libraries, and successful business models are
not enough to face down the local dynamos on their home turf."
The pace of expansion of some of these economies will accelerate in the
coming years.(1) As mature markets slow down and potentially enter
recessions, RDEs are becoming increasingly important to global companies.
"China and India are the hot global growth markets for companies today. But
Western companies are at serious risk of missing out on the growth boom in
such markets," said report coauthor and New Delhi-based BCG partner Arindam
Bhattacharya. "In fact, these markets are being conquered by dynamic local
companies, which are mastering local challenges, creating huge competitive
advantage and shareholder value."
With over $60 billion in total revenues(2) and average year-on-year growth
rates of over 50 percent, the local dynamos are already key players in
their domestic markets: 37 out of the 50 have become clear market leaders
in their segments, often at the expense of bigger, international rivals.
"In many countries these are truly turning out to be David-versus-Goliath
stories," added Michael. "Some of these companies are real upstarts that
were not even on the radar until recently. And now, all of a sudden, they
are setting the pace in their own markets."
By many measures, the BCG 50 local dynamos are already outperforming
established industry leaders. They are growing revenues faster than the
S&P 500 and the Fortune Global 100 and have better operating margins and
have created far more shareholder value in the last four years.
"Unlike other companies in RDEs that are deciding to go global, local
dynamos are opting to stay home instead, at least for now," Bhattacharya
added. "In doing so, they are adding another dimension to the level of
competition that multinational companies face. For the global leaders, it
is truly becoming a case of competing everywhere, with everyone."
As a group, the BCG 50 represent a broad range of industries. They
primarily focus on business-to-consumer markets and target the middle
class. Notably, 10 out of the 50 companies target a group that other
companies ignore altogether: the poor.
Of the 50 companies on BCG's list, the bulk (41) are from China, India,
Brazil, and Mexico, with the rest coming from 6 other rapidly developing
economies. All of them are characterized by the use of an innovative
business model adapted to win in their home markets.
The BCG 50 local dynamos include companies such as Shanda, Tencent, and
Goodbaby from China, SKS Microfinance and Apollo Hospitals from India,
Grupo Elektra from Mexico, and O Boticário from Brazil.
For media inquiries or to order a copy of The BCG 50 Local Dynamos please
contact Eric Gregoire -
gregoire.eric@bcg.com or 617-850-3783.
About the Methodology for Selecting the BCG 50 Local Dynamos
Produced by BCG's Global Advantage Initiative, the report is based on a
detailed screening of several hundred companies from RDEs. First the BCG
research team chose ten countries on the basis of economic size, real GDP
growth, and market potential. Next it selected a group of companies that
had achieved domestic success in these countries despite lacking such
traditional means of incumbency in RDEs as government ownership or a
monopoly license. Finally, it chose 50 of the companies that were really
dynamos and therefore the owners of an original business model specifically
adapted for the unique challenges of their domestic markets.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm
and the world's leading advisor on business strategy. We partner with
clients in all sectors and regions to identify their highest-value
opportunities, address their most critical challenges, and transform their
businesses. Our customized approach combines deep insight into the dynamics
of companies and markets with close collaboration at all levels of the
client organization. This ensures that our clients achieve sustainable
competitive advantage, build more capable organizations, and secure lasting
results. Founded in 1963, BCG is a private company with 66 offices in 38
countries. For more information, please visit
www.bcg.com.
(1) The Economist Intelligence Unit estimates that emerging markets will
account for 45 percent of the world's GDP and 60 percent of world GDP
growth by 2010.
(2) Figures from 2006, the most recent year for which full financial data
are available for comparison.
Contact Information: The Boston Consulting Group
Eric Gregoire
Global Media Relations Manager
Tel +1 617 850 3783
Fax +1 617 850 3701