|By Marketwired .||
|July 10, 2014 12:01 AM EDT||
BOSTON, MA -- (Marketwired) -- 07/10/14 -- The 2014 BCG local dynamos are a group of 50 companies based in emerging markets that have succeeded by staying home and beating both multinationals and local, often state-owned companies, according to a report by The Boston Consulting Group (BCG).
While many emerging-market companies have global aspirations, the local dynamos are winning by catering to the needs of customers in their home market. Many of them are also developing world-class capabilities rivaling much larger, older companies, according to 2014 BCG Local Dynamos: How Companies in Emerging Markets Are Winning at Home.
Between 2009 and 2013, for example, the revenues of the local dynamos grew by 28 percent annually. This faster growth has generated even greater returns for shareholders. Between 2009 and 2013, their total shareholder return has risen 26 percent annually, much steeper than benchmarks composed of similar companies such as the MSCI Emerging Markets index.
BCG first published its list of local dynamos in 2008. "We decided to reprise the list because emerging markets, and the companies within them, have changed so dramatically in the past six years," said David C. Michael, a BCG senior partner and coauthor of the report. "As global growth has slowed, global companies have flocked to emerging markets. The local dynamos have thrived despite rising competition."
Five examples illustrate the successes of the larger group of 50 local dynamos.
Xiaomi. This Chinese mobile-phone company has skyrocketed to success by capturing the enthusiasm of young people in China for the Internet. The company, founded in 2010, sold 18.7 million smartphones in China in 2013 at prices about half of those of comparable Samsung or Apple phones. Chief executive Lei Jun has ambitions to sell 60 million smartphones in 2014.
BIM. With more than 4,000 stores -- up from 21 in 1995 -- and despite the presence of global competitors Carrefour, Metro, and Tesco, BIM is the largest grocer in Turkey. BIM, a discounter with bare-bones store interiors and a product portfolio limited to 600 items, has revolutionized the retail market in Turkey, which historically has had a low share of modern retail shopping. BIM has won over the newly emerging middle class with good quality, low prices, and convenience.
Discovery Health. With more than 2.4 million members, Discovery Health is the largest private health-insurance administrator in South Africa. But what makes Discovery so intriguing is that it has changed the rules of health insurance. It is encouraging healthy behaviors, such as exercising or buying beneficial foods, by giving points similar to frequent flyer miles. The rewards range from reduced premiums to exotic holidays.
Banco Mercantil del Norte. In Mexico, Banco Mercantil del Norte, or Banorte, wanted to reach potential customers without investing in expensive bank branches. Banorte decided to rely on other companies' bricks and mortar, partnering with Telecomm-Telegrafos, a rural telecom operator with 1,621 retail locations; 7-Eleven, one of the fastest-growing convenience chains in Mexico, with 1,720 contact points; Tiendas Extra, a convenience store with 883 locations; Soriana, a supermarket chain offering 633 points of sale; and Grupo Control, with 75 points of contact as of March 2014. These partnerships aim to offer basic financial products such as deposits, credit cards, remittances, and withdrawals.
Shriram Transport Finance. This company was founded in India in 1979 to provide financing to owners of small trucks, a segment that financial institutions were largely ignoring. Shriram originally started financing new vehicles but soon realized that the owners could not afford the payments, so the company entered the used-truck financing market. Shriram has captured about a 25 percent share of the preowned commercial-vehicle financing market; most of the rest of that market is dominated by unorganized private financiers.
The report contains dozens of similar case studies of local dynamos. "These companies are not relying on low costs and cozy relationships with the state to prosper. They are truly dynamic and farsighted," said Vincent Chin, a BCG senior partner and coauthor of the report.
In order to identify the 50 local dynamos, BCG screened thousands of companies in search of innovative business models and approaches to winning in emerging markets. We conducted a broad search for successful private companies that had strong reputations and a domestic focus but did not have traditional sources of advantage, such as government ownership, large land ownership, or a monopoly license. We then narrowed the list to those companies that were succeeding by adapting to the unique challenges of their home markets and were among the leading private-sector companies in their industries.
The report, 2014 BCG Local Dynamos: How Companies in Emerging Markets Are Winning at Home, concludes with recommendations for global companies seeking to compete in these markets. These companies need to emulate the local dynamos -- their ambition, localized business models, and their ability to hire top local talent -- without abandoning their own core advantages, such as scale, brand, quality, and capital.
A brief video featuring David C. Michael discussing the report further can be viewed here.
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 [email protected].
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 81 offices in 45 countries. For more information, please visit bcg.com.
Bcgperspectives.com 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 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 by PC, mobile, iPad, Facebook, Twitter, and LinkedIn.
The Boston Consulting Group
Global Media Relations Manager
Tel +1 617 850 3783
Fax +1 617 850 3701
WebRTC services have already permeated corporate communications in the form of videoconferencing solutions. However, WebRTC has the potential of going beyond and catalyzing a new class of services providing more than calls with capabilities such as mass-scale real-time media broadcasting, enriched and augmented video, person-to-machine and machine-to-machine communications. In his session at @ThingsExpo, Luis Lopez, CEO of Kurento, will introduce the technologies required for implementing thes...
Sep. 2, 2015 02:15 PM EDT
Whether you like it or not, DevOps is on track for a remarkable alliance with security. The SEC didn’t approve the merger. And your boss hasn’t heard anything about it. Yet, this unruly triumvirate will soon dominate and deliver DevSecOps faster, cheaper, better, and on an unprecedented scale. In his session at DevOps Summit, Frank Bunger, VP of Customer Success at ScriptRock, will discuss how this cathartic moment will propel the DevOps movement from such stuff as dreams are made on to a prac...
Sep. 2, 2015 02:00 PM EDT Reads: 248
Mobile, social, Big Data, and cloud have fundamentally changed the way we live. “Anytime, anywhere” access to data and information is no longer a luxury; it’s a requirement, in both our personal and professional lives. For IT organizations, this means pressure has never been greater to deliver meaningful services to the business and customers.
Sep. 2, 2015 02:00 PM EDT Reads: 815
17th Cloud Expo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterprises ar...
Sep. 2, 2015 02:00 PM EDT Reads: 1,568
Consumer IoT applications provide data about the user that just doesn’t exist in traditional PC or mobile web applications. This rich data, or “context,” enables the highly personalized consumer experiences that characterize many consumer IoT apps. This same data is also providing brands with unprecedented insight into how their connected products are being used, while, at the same time, powering highly targeted engagement and marketing opportunities. In his session at @ThingsExpo, Nathan Trel...
Sep. 2, 2015 02:00 PM EDT Reads: 261
The 3rd International WebRTC Summit, to be held Nov. 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA, announces that its Call for Papers is now open. Topics include all aspects of improving IT delivery by eliminating waste through automated business models leveraging cloud technologies. WebRTC Summit is co-located with 15th International Cloud Expo, 6th International Big Data Expo, 3rd International DevOps Summit and 2nd Internet of @ThingsExpo. WebRTC (Web-based Real-Time Com...
Sep. 2, 2015 01:45 PM EDT Reads: 1,551
SYS-CON Events announced today that HPM Networks will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. For 20 years, HPM Networks has been integrating technology solutions that solve complex business challenges. HPM Networks has designed solutions for both SMB and enterprise customers throughout the San Francisco Bay Area.
Sep. 2, 2015 01:30 PM EDT Reads: 937
The 17th International Cloud Expo has announced that its Call for Papers is open. 17th International Cloud Expo, to be held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, APM, APIs, Microservices, Security, Big Data, Internet of Things, DevOps and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding bu...
Sep. 2, 2015 01:30 PM EDT Reads: 1,633
SYS-CON Events announced today that the "Second Containers & Microservices Expo" will take place November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Containers and microservices have become topics of intense interest throughout the cloud developer and enterprise IT communities.
Sep. 2, 2015 01:30 PM EDT Reads: 619
The 5th International DevOps Summit, co-located with 17th International Cloud Expo – being held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA – announces that its Call for Papers is open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the ...
Sep. 2, 2015 01:15 PM EDT Reads: 1,617
While many app developers are comfortable building apps for the smartphone, there is a whole new world out there. In his session at @ThingsExpo, Narayan Sainaney, Co-founder and CTO of Mojio, will discuss how the business case for connected car apps is growing and, with open platform companies having already done the heavy lifting, there really is no barrier to entry.
Sep. 2, 2015 12:45 PM EDT Reads: 191
In his session at @ThingsExpo, Lee Williams, a producer of the first smartphones and tablets, will talk about how he is now applying his experience in mobile technology to the design and development of the next generation of Environmental and Sustainability Services at ETwater. He will explain how M2M controllers work through wirelessly connected remote controls; and specifically delve into a retrofit option that reverse-engineers control codes of existing conventional controller systems so the...
Sep. 2, 2015 12:45 PM EDT Reads: 201
DevOps Summit, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 17th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long development...
Sep. 2, 2015 12:45 PM EDT Reads: 1,556
Moving an existing on-premise infrastructure into the cloud can be a complex and daunting proposition. It is critical to understand the benefits as well as the challenges associated with either a full or hybrid approach. In his session at 17th Cloud Expo, Richard Weiss, Principal Consultant at Pythian, will present a roadmap that can be leveraged by any organization to plan, analyze, evaluate and execute on a cloud migration solution. He will review the five major cloud transformation phases a...
Sep. 2, 2015 12:21 PM EDT
Too often with compelling new technologies market participants become overly enamored with that attractiveness of the technology and neglect underlying business drivers. This tendency, what some call the “newest shiny object syndrome,” is understandable given that virtually all of us are heavily engaged in technology. But it is also mistaken. Without concrete business cases driving its deployment, IoT, like many other technologies before it, will fade into obscurity.
Sep. 2, 2015 12:15 PM EDT Reads: 410