Report by The Boston Consulting Group Finds 100 Companies From
Rapidly Developing Economies Are the "Hidden Engines" of the Global
Half of BCG's "Global Challengers" Could Qualify for Inclusion in the
Fortune Global 500 in Five Years as They Grow Faster and More
Profitably Than Multinationals From Developed Countries
BOSTON, MA -- (Marketwire) -- 01/18/11 -- A group of companies from
rapidly developing economies has begun to leapfrog past established
multinationals in global industry rankings. In a report published
today, The Boston Consulting Group (BCG) identifies 100 of these
so-called global challengers, about half of which could qualify for
inclusion in the Fortune Global 500 within the next five years.
Some of the companies -- selected from 16 countries -- have already
achieved international renown, including China's Huawei Technologies,
the world's second-largest mobile telecom supplier, and Li & Fung
Group, the world's biggest sourcing company. But others are poised to
win international recognition in the near future. Overall, the global
challengers generated revenues of $1.3 trillion in 2009.
"Companies on the Move: Rising Stars from Rapidly Developing
Economies Are Reshaping Global Industries" is the latest in BCG's
global challenger series, which was launched in 2006 to identify
companies shaking up the global economy. In the latest report, BCG
identifies 23 new fast-growing companies. The new global challengers
replace those that may have suffered or lost their way during the
Great Recession or that may not be expanding as quickly as this
year's listed companies are.
The 100 challenger companies grew annually by 18 percent and averaged
operating margins of 18 percent from 2000 through 2009. During this
period, the annualized total shareholder return of the global
challengers that were publicly listed was 17 percent. If the
challengers continue on their current growth path, they could
collectively generate $8 trillion in revenues by 2020 -- an amount
roughly equivalent to what the S&P 500 companies generate today.
"The global challengers are entering the new decade from a position
of strength. So farsighted multinationals should view them as
potential customers and partners and find ways to work with them for
mutual benefit," said Sharad Verma, a BCG partner and a coauthor of
the report. "As competition intensifies, the boundaries between these
two distinct sets of companies will continue to blur."
Although China, India, Brazil, Mexico, and Russia still dominate the
list of home nations, countries in other regions are starting to
foster world-class companies. In particular, Africa, with four global
challengers this year (from South Africa and Egypt), is emerging as a
region on the move. It is rich in natural resources, has emerged as a
growth market for several industries, and demonstrates newfound
The global challengers have historically been well distributed across
industries. Industrial goods, with 35 challengers, and resources and
commodities, with 24, continue to lead the list. The construction
industry (with six challengers) moved up the list, reflecting the
growing importance of infrastructure in developing markets.
The need to fuel growth in rapidly developing economies has set
global challengers on the acquisition trail. From January 2006
through August 2010, challengers in the resources and commodities
industry announced 154 cross-border mergers and acquisitions, far
more than any other sector and nearly twice the 86 deals completed in
the five previous years.
But for the moment, many challengers are choosing to focus on
solidifying their positions in fast-growing developing markets,
rather than breaking into sluggish developed markets. It is easy to
see why: the middle class in developing markets will make up 30
percent of the global population by 2020. "Global challengers can
generate tremendous growth by serving local and nearby markets," said
David Michael, leader of BCG's Global Advantage practice.
"Established multinationals will need to work extra hard to
understand and break into these markets."
To receive a copy of the report or arrange an interview with one of
the authors, please contact Dave Fondiller at +1 212 446 3257 or
Methodology for Selecting the 2011 BCG Global Challengers
Produced by BCG's Global Advantage and Corporate Development
practices, the report is based on a detailed screening of thousands
of companies from RDEs. The BCG research team homed in on large
players. It sought companies that already had high international
revenues or large cross-border M&A deals and companies with credible
aspirations to build truly global footprints. It excluded those that
could pursue only low-end, export-driven models. It measured the size
of each company relative to other challengers and to multinational
competitors in their industries in order to ensure that the global
challengers are credible contenders to become market leaders.
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 71 offices in 41 countries. For
more information, please visit www.bcg.com.
The Boston Consulting Group
Director of Media Relations, The Americas
Tel +1 212 446 3257
Fax +1 212 446 2801
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