The BCG report elaborates how MNCs struggle in RDEs like India, win-win partnerships are the best option
W e admired their supreme fighting skills as depicted in the Hollywood flick 300, as they resisted a much larger Persian army that came in scores. Fact is that Spartans were indeed phenomenal warriors. It is said that the world learned a lot from their fighting techniques. Cut to the 21st century corporate world, the Boston Consulting Group (BCG) seems to have identified some such Spartans in the RDEs (Rapidly Developing Economies) of the world! In its latest report titled ‘The BCG 50 Local Dynamos’, BCG has highlighted 50 such companies from ten key RDE countries like China, India, Brazil et al, which have successfully resisted competition, both from MNCs as well as state owned companies in their respective domestic markets. Eleven companies from India have been identified as among the 50 dynamos like Bharti Airtel, Titan (from Tata), ITC Limited, ICICI Bank et al as leading the pack, ranking it second in the list. China ranks number 1 with 15 companies in the list.
“Proper supply chain management, local understanding and above all, market penetration are factors, which help these domestic companies to stay far ahead of their foreign counterparts,” explains Sushil Dungarwal, Senior Analyst, FICCI. Agrees Harit Shah, Analyst, Angel Broking, who feels that, thanks to the local expertise, once the companies have “proper execution skills in place, the job is already half done.” The report cites, for instance how ICICI Bank is having a great run, with around $5.2 billion in interest income in comparison to around $1.07 billion of HSBC. Two companies from the Tata group are in the list – Indian Hotels and Titan Industries. Bharti Airtel has been included for making Hutch (now Vodafone) run for their money with its ever increasing subscription base, which currently stands at 62 million. BCG agrees that many more companies fit the bill, but their selected 50 are ones with a unique business model and excellent performance in highly challenging environments.
Actually, one can well make an argument regarding whether these local dynamos are achieving success due to their own strengths or due to the shortcomings of MNCs. In essence, the report only seeks to highlight how MNCs find it typically difficult to compete in new markets and the perils they face if they make an oversimplified analysis of these markets. “Understanding the local buying behaviour and pattern with vast differentiation on region to region basis is a tough nut to crack for these MNCs,” comments Shah.
W e admired their supreme fighting skills as depicted in the Hollywood flick 300, as they resisted a much larger Persian army that came in scores. Fact is that Spartans were indeed phenomenal warriors. It is said that the world learned a lot from their fighting techniques. Cut to the 21st century corporate world, the Boston Consulting Group (BCG) seems to have identified some such Spartans in the RDEs (Rapidly Developing Economies) of the world! In its latest report titled ‘The BCG 50 Local Dynamos’, BCG has highlighted 50 such companies from ten key RDE countries like China, India, Brazil et al, which have successfully resisted competition, both from MNCs as well as state owned companies in their respective domestic markets. Eleven companies from India have been identified as among the 50 dynamos like Bharti Airtel, Titan (from Tata), ITC Limited, ICICI Bank et al as leading the pack, ranking it second in the list. China ranks number 1 with 15 companies in the list.
“Proper supply chain management, local understanding and above all, market penetration are factors, which help these domestic companies to stay far ahead of their foreign counterparts,” explains Sushil Dungarwal, Senior Analyst, FICCI. Agrees Harit Shah, Analyst, Angel Broking, who feels that, thanks to the local expertise, once the companies have “proper execution skills in place, the job is already half done.” The report cites, for instance how ICICI Bank is having a great run, with around $5.2 billion in interest income in comparison to around $1.07 billion of HSBC. Two companies from the Tata group are in the list – Indian Hotels and Titan Industries. Bharti Airtel has been included for making Hutch (now Vodafone) run for their money with its ever increasing subscription base, which currently stands at 62 million. BCG agrees that many more companies fit the bill, but their selected 50 are ones with a unique business model and excellent performance in highly challenging environments.
Actually, one can well make an argument regarding whether these local dynamos are achieving success due to their own strengths or due to the shortcomings of MNCs. In essence, the report only seeks to highlight how MNCs find it typically difficult to compete in new markets and the perils they face if they make an oversimplified analysis of these markets. “Understanding the local buying behaviour and pattern with vast differentiation on region to region basis is a tough nut to crack for these MNCs,” comments Shah.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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