Companies from 17 countries impact global industries.
NEW DELHI, INDIA — Global “challenger” companies from emerging markets are overtaking traditional multinationals, according to a report by the Boston Consulting Group (BCG).
The international consulting firm based in Boston (with Canadian offices in Toronto) has identified 100 companies that are growing so quickly overseas they’re “reshaping industries.”
Its Allies and Adversaries report finds these companies from 17 countries are outpacing household names in the US and Europe and are having a profound impact on the global economy. Colombia and Qatar have joined the list for the first time and seven companies with large sustainable global positions have moved past challenger status.
In the past five years they’ve have added 1.4 million jobs, while employment at the nonfinancial S&P 500 companies stayed flat. Average revenue was $26.5 billion in 2011, compared with $21 billion for the S&P 500′s companies and $20 billion for the entire S&P 500.
In the same year, they purchased more than $1.7 trillion of goods and services and invested more than $330 billion in capital expenditures.
“If ever there was a wake-up call for business leaders in the West, this is it,” said David Michael, coauthor of the report. “We have been monitoring the rise of global challenger companies for nearly a decade, and the ambition of these companies — what we call the accelerator mindset — has never been stronger.”
Twenty-six of the companies are new to the list, displacing other companies whose attempts to globalize were met with obstacles. Several of the displaced companies were from BRIC (Brazil, Russia, India, and China) nations.
The report calls on business leaders in the West to work with this new generation of companies. It cites one partnership involving Dr. Reddy’s Laboratories, an Indian pharmaceutical company known for generic manufacturing, which works on product development, and Merck, a health care company based in Germany, that handles the manufacturing of generic cancer treatments.
The number of state-controlled companies on the list has fallen from 36 in 2006 to 26 in 2013.
BCG noted many state-owned and state-controlled enterprises have not yet cracked the code of global expansion.
“They need to learn how to attract talent, take risks, and develop business models that work outside their home markets,” said David Lee, coauthor and a BCG partner based in Hong Kong. “These are things that all companies need to master, and they can be particularly challenging for those affiliated with the state.”
Click here for the complete report.