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BCG Names 100 'Global Challengers' From Emerging Markets That Are Reshaping Global Industries

These Fast-Growing Companies Are Spending $1.7 Trillion a Year to Fuel Growth -- Creating Enormous Opportunities for Western Companies That Can Win Their Business as Allies

NEW DELHI, INDIA -- (Marketwire) -- 01/15/13 -- The Boston Consulting Group has identified "100 global challenger" companies from the emerging markets that are growing so quickly overseas that they are reshaping industries and surpassing many traditional multinational companies.

In "Allies and Adversaries," a report published today, BCG finds that these companies are outpacing household names in the U.S. and Europe and are having a profound impact on the global economy. They come from 17 countries -- with companies from Colombia and Qatar joining the list for the first time. Also for the first time, the list includes companies from the financial services, health care equipment, and electronic commerce sectors.

In the past five years, these companies -- many of them little known in the West -- have added 1.4 million jobs, while employment at the nonfinancial S&P 500 stayed flat. Their average revenue was $26.5 billion in 2011, the most recent year for which figures are available, compared with $21 billion for the S&P 500's nonfinancial 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 C. Michael, coauthor of the report, head of BCG's globalization practice, and coauthor of a new book called "The $10 Trillion Prize: Captivating the Newly Affluent in China and India" (Harvard Business Review Press). "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."

The report is the fifth in a series of publications identifying the fastest-growing companies in the emerging markets. The first was published in 2006.

Allies and Adversaries is part of BCG's Game-Changing Program to help leaders and their companies capitalize on the opportunities created by the seismic shifts in the global economy.

The report calls on business leaders in the West to follow the example of other multinationals that are working with this new generation of companies. In one partnership, Dr. Reddy's Laboratories, an Indian pharmaceutical company known for generic manufacturing, is conducting product development, while Merck, a health care company based in Germany, is handling the manufacturing of generic cancer treatments. In another, India's Bajaj Auto and Japan's Kawasaki are jointly marketing products in the Philippines and Indonesia.

"Global challengers bring far more to the table than a low-cost structure," said Tenbite Ermias, coauthor and head of BCG's office in South Africa. "Multinationals that view global challengers only as low-cost competitors misunderstand their competitive threat and their potential for partnership."

Twenty-six of the companies are new to the list in 2013, having displaced other companies whose attempts to globalize were met with obstacles. Several of the displaced companies were from the BRIC nations of Brazil, Russia, India, and China. Once home to 84 challengers, these nations now account for 69 companies on BCG's list.

Also, state-owned and state-controlled companies have struggled to match the success of private companies on the global stage. The number of state-controlled companies on the list has fallen from 36 in 2006 to 26 in 2013. While many of these companies are satisfied with focusing on their domestic markets, others have found it difficult to excel overseas.

"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," explained 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."

Methodology for Selecting the 2013 BCG Global Challengers

Produced by BCG's Global Advantage practice area, the report was based on a comprehensive screening of thousands of companies from emerging markets conducted by BCG experts in each such market. Companies generally needed to have annual revenues totaling at least $1 billion and overseas revenues of at least 10 percent of total revenues, or $500 million. The screening measured the size of each company relative to other challengers and to multinational competitors in their industries. It also analyzed each company's international presence, the number and size of its international investments, its M&A activity over the past five years, and the strength of its business model. The team excluded those companies that pursue only low-end, export-driven businesses.

A copy of the report can be downloaded at www.bcgperspectives.com.

To arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or gregoire.eric@bcg.com.

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 from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. 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 78 offices in 43 countries. For more information, please visit bcg.com.

About bcgperspectives.com
Bcgperspectives.com is a new website -- available on PC, mobile phone, and iPad -- that features the latest thinking from BCG experts as well as from CEOs, academics, and other leaders. It covers issues at the top of senior management's agenda. It also provides unprecedented access to BCG's extensive archive of thought leadership stretching back almost 50 years to the days of Bruce Henderson, the firm's founder and one of the architects of modern management consulting. All of our content -- including videos, podcasts, commentaries, and reports -- can be accessed via PC, mobile, iPad, Facebook, Twitter, and LinkedIn.

The BCG Game-Changing Program
We are living in an age of accelerating change. The old ways are rapidly becoming outdated, obsolete. New opportunities are opening up. It is clear that the game is changing. At BCG, we are optimistic: we think that the fundamental drivers of growth are stronger than they have ever been in human history. But to capitalize on this trend, leaders need to be proactive, to challenge the status quo, to make bold moves: they need to change the game, too. The decisions they make now, and over the next ten years, will have an extraordinary and enduring impact on their own fortunes as well as those of their organizations, the global economy, and society at large. To help leaders, and to mark our fiftieth anniversary, BCG is pulling together the best ideas, insights, and ways to win -- to own the future. This report is part of that endeavor.

The Boston Consulting Group
Eric Gregoire
Global Media Relations Manager

Tel +1 617 850 3783
Fax +1 617 850 3701
gregoire.eric@bcg.com

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