Pressing on with global business growth in an era of uncertainty
8 min read
16 November 2016
According to business consulting firm Boston Consulting Group (BCG), while business growth remains essential, it’s more challenging given the uncertain global environment and ongoing disruption. So what does this mean for global business growth?
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.
Emerging world businesses running next-generationenterprise resource planning systems benefit from a powerful toolkit of capabilities to support global business growth.
- Sophisticated tax engines assist with global tax determination
- Compliance platforms to support local reporting requirements
- Currency engines to assist in helping ease trading complexity in multiple currencies
- Cross-border trading functionality provides support for reporting of goods shipped/source to/from countries and intra stat reporting
- Support for multiple accounting standards critical to support revaluation requirements around assets according to IFRS guidelines and US Gap standards
- Support for regional and local banking standards, i.e. SEPA requirements for Euro states
- Product classification support to meet standardized international codes (UNSPC codes and regional requirements)
- Multi-lingual support for customer-facing documents and to support overall user experience
- Social enterprise capabilities to support internal and external team collaboration across borders and proactively manage the challenges of a virtual team environment
Digital furthers global business growth
Companies that offer web-based products and services can excel in the global business growth arena, simply because it’s easier and less expensive to port digital offerings across borders.
However, in her Harvard Business Review article, Seven Traits of Companies on the Fast Track to International Growth, author Nataly Kelly says that even in older industries that pre-date the web, such as manufacturing and pharmaceuticals, those companies that are more invested in online and software-based models for strategic areas tend to have faster rates of global business growth.
Her take: Digitisation makes a company more agile and responsive to opportunities in global markets.
Many organisations leverage ecommerce to give them a virtual presence and an additional sales channel with relatively minimal investment. But outside of ecommerce, digital capabilities can bring to the fore operational costs and inefficiencies, and provide the global “glue” to bind the extended organisation together and improve collaboration.
This can then support channel partnerships to extend a company’s presence in new countries/regions and help drive greater return on investment from potential strategic mergers and acquisitions.
The good news is that buying and implementing new technology is easier and more cost effective than ever before – so organisations can quickly use these capabilities to give themselves a major competitive leg up.
However, the recent advent of cloud computing is a great global technology democratiser – making powerful technology affordable to organisations where previously it was out of reach.
The significance of this is far-reaching and developed world companies must be vigilant and aggressive in their use of new technology, lest they suddenly find themselves outflanked by upstart emerging market businesses, potentially shifting the nexus of power in the global economic and business landscape.
Andy Archer is the regional VP for UK and Ireland at Epicor Software