We’re in a scenario that may be stalling developed world businesses’ efforts to land and expand operations to effectively drive global business growth. But this is a big mistake, because emerging world businesses are moving fast to gain traction.
Multi-national companies need to develop strategies to counter increasingly strong emerging-market rivals – both the strength and volume of which is growing, says BCG.
These “global challengers” are fueled by high aspirations for global leadership and decisive action.
According to David Michael, professor of practice, School of Global Policy and Strategy, University of California, San Diego (UCSD) and former senior partner at BCG, a decade ago it was a struggle to identify 100 such companies; today it’s difficult to winnow the list down to 100.
His view: multinationals are making a grave misstep if they fail to account for these upstart competitors and formulate a global business growth plan to respond to this threat.
So how can developed world businesses bolster their competitive position to keep emerging market businesses from overtaking them?
First, they must evaluate competitors’ strengths and weaknesses. One area of focus is technology. According to a recent study, emerging world businesses are moving fast to gain a technological edge over their developed world counterparts, and thus may be better positioned for growth.
In a study of more than 1,800 global business executives, emerging market executives were shown to be more bullish on leveraging technology to provide the requisite flexibility and agility to fuel growth as compared to their developed market counterparts.
Key findings from the study showed:
- 54 per cent of emerging market business execs polled cited “technology leadership” as a significant growth factor (compared to just 36% of developed market business execs).
- 75 per cent of emerging market business execs said flexible working practices and technologies, such as mobile working, are significant in helping retain key people, compared to just 62 per cent of those in developed countries.
- Emerging market business execs were also more likely to see the value in using technology to liberate personnel from manual tasks to focus on higher value-added work activities. 75 per cent of emerging market business leaders said this was a “significant” contributor to their staff retention, compared to only 65 per cent of developed market business leaders.
Newer business systems put more global horses under the hood
One of the benefits that emerging market businesses have is they aren’t tied to old business processes and systems. They are free to implement modern present-day business systems that leverage newer technologies such as mobile and cloud to improve agility and remove complexity.
With these systems, they have the ability to bring information to those who need it, at the moment they need it, in a form that they can use, and in a way that they can take action.
This can give them a tremendous edge over more established businesses in the developed world that might be running older systems that prevent them from being responsive and adaptable to change.
Newer business systems, such as enterprise resource planning (ERP) solutions that are key to running and managing operations, have also been designed to support the needs of driving global business growth.
Continue on the next page for the details on the global business growth powers unlocked to emerging market businesses through toolkits.