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May 31, 2006
Development through wealth creation - The 100 Top Companies from Rapidly Developing Economies
Max Oliva, Associate Director of IE's Social Impact Management
According to the Boston Consulting Group, 100 top companies from rapidly developing economies are changing the World. These are a group of emerging challengers that are becoming important players in both developing and developed markets throughout the globe.
The companies in the report have combined annual revenue of US$715 billion and grow at an average rate of 24% a year. Asia is home to the leading majority of companies, with 70 of them, mainly in China (44) and India (21). Latin America with 18 companies, from Brazil (12) and Mexico (6) follows. The remaining 12 are based in Egypt, Russia and Turkey.
The shareholder value they create is impressive; from 2000 to March 2006, their total shareholder return (TSR, 60/100 are public companies) increased by more than 150%; this while the TSR of companies listed in Morgan Stanley’s Emerging Market Index rose by 100% and that of S&P 500 declined slightly.
One of the early movers in the globalization of this list is Mexico’s Cemex, which has consistently generated superior returns compared with its international competitors. Other companies such as Johnson Electric, based in China is the world leader in small electric motors and Brazil’s Embraco is world leader in compressors.
The analysis considers different strategic models for globalization as well as their competitive strengths such as low costs, strong operating platforms, large local markets as well as their weaknesses among which innovation, supply chain management and going to market outstand.
BCG expects that by 2010 the RDE 100 have doubled their international revenue. Are these emerging market firms likely to outplace thier western counterparts?
See the full report here.
Posted on 31 May 2006
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