BCG Global Challengers: Bigger and More Ambitious Than Ever
From 2000 through 2013, the Revenues of the 2014 BCG Global Challengers Grew by 18 Percent Annually
A group of 100 companies from emerging economies are growing larger and growing up so rapidly that they now are leaders in many key global markets. In a report published today, The Boston Consulting Group (BCG) identifies 100 “global challengers” that are vying for leadership of key industries and driving global economic growth.
This year’s list of BCG global challengers reflects the reshaping of the global economy, as the number of emerging markets represented is larger than ever. The 2014 BCG global-challengers list includes companies from 18 countries, eight more than on the original 2006 list. The BRIC nations of Brazil, Russia, India, and China, once home to 84 challengers, are now down to 65. From 2000 through 2013, their revenues grew at an annual average rate of 18 percent.
From 2008 through 2013, the 2014 BCG global challengers increased their employment by 32 percent, compared with 11 percent for the nonfinancial S&P 500. Even more striking, the average revenue per employee of the global challengers exceeded that of the nonfinancial S&P 500 companies—$479,000 compared with $440,000.
Several of the new global challengers come from new categories, including quick-serve restaurants, represented by companies such as the Philippines’s Jollibee Foods, with 2,000 restaurants; and wine and spirits, represented by Chile’s Concha y Toro, the world’s seventh-largest winery, and Thailand’s Thai Beverage. These additions show both the growing purchasing power of the middle class in emerging markets and the success of companies in developing capabilities beyond low-cost manufacturing.
“Eight years ago, when we created the global-challenger list, it was dominated by Chinese and Indian manufacturers that largely competed on the basis of low costs,” said Dinesh Khanna, a coauthor based in Singapore and BCG’s global leader of its Global Advantage practice. “Today, the global challengers come from a much wider range of industries and countries—and increasingly from consumer goods sectors.”
One of the most successful consumer-oriented challengers has been India’s Bajaj Auto, the leading motorcycle brand in Nigeria. Bajaj sells more motorcycles in Africa than in its overseas Asian markets, according to the report, Redefining Global Competitive Dynamics: 2014 BCG Global Challengers.
Despite their successes, the global challengers and other similar companies are at a turning point. They have achieved the “easy” growth in their home and nearby markets, according to the report. “To win in the future, these companies will need to invest in talent, innovation, and other capabilities. Their long-term success hinges on these investments,” said Christoph Nettesheim, a BCG senior partner and coauthor based in Singapore.
Several challengers have made the transition to become global leaders. Five former global challengers graduated from the list, compared with just two in 2013. This year’s graduates include Mexico’s Grupo Bimbo, the world’s largest baker, and two Chinese companies: Huawei Technologies, the world’s largest telecom-equipment supplier; and Lenovo Group, the world’s largest PC maker.
This is BCG’s sixth global-challenger report, a reflection of the firm’s commitment to understanding emerging markets and helping companies within them become global leaders. Based on our work with emerging-market companies, we have created a global “challenger to leader” (C2L) program. C2L helps companies make global ambitions part of their DNA by transforming their people and organization practices, operations, and general go-to-market activities. While the program addresses 20 initiatives, the report focuses on two—talent and innovation—that are especially critical for global leaders to address.
A copy of the report can be downloaded at www.bcgperspectives.com.
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