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Emerging-Market Companies Now Compete Directly Against Affluent-Market Companies To Make The Flat World Even Flatter

A new book by the Boston Consulting Group (BCG) titled Globality: Competing with Everyone from Everywhere for Everything examines this new era of international business competition.  The focus of the book is how companies in countries with rapidly-developing economies are now challenging developed-country companies that have dominated globalization 87 for the past two decades.  The BCG authors conclude that both the incumbents and challengers will discover themselves competing with everyone (including suppliers and former partners) from everywhere (in both developed and emerging markets) for everything (including customers and employees).

The BCG authors have gathered information and insight from business leaders around the world to allow them to produce a thoughtful analysis of what is transpiring today in global commerce. Examples of material in the book include:

Many examples of global incumbent companies from the United States, Europe, and Japan that have transformed themselves by adapting the practices of the challengers to their own businesses and that have developed new strategies that will enable them to successfully compete in the years ahead.

• New ideas about management and organization. In the era of globality, the concept of "headquarters" is changing and people no longer think in terms of "home" countries or "foreign" markets. Western business orthodoxy will meld with eastern business philosophy to create a completely new mindset that embraces profit and competition as well as collaboration and sustainability.

• Thoughts about how the world is being fundamentally transformed in this emerging era of mega competition. New markets are opening and industries are being transformed. A huge consumer class is being created. Even the positions of nations within the world community are shifting.

The authors argue, using much of the same logic as Thomas Friedman, that this new globality is creating vast opportunities, as well as threats, for developed-world multinationals and new challengers alike.  An example of these changing times is the ever increasing number of companies from emerging-markets that are included in the Fortune 500 rankings of the largest companies in the world.  There are now 62 of these companies on the Fortune 500 list, with most of them being from Brazil, China, India and Russia.  Based on current trends, experts predict that emerging-market companies will account for one-third of the Fortune 500 list within 10 years.

The BGC authors also make the point that population is another factor that is changing the face of globalization and capitalism.  The tremendous size of consumer markets in emerging economies such as China and India allow for very rapid growth rates that can significantly shift the balance of business activity.

The evidence of growing economies in developing countries is all around us: 

• Tata Motors of India has purchased Jaguar from Ford Motor Company
• Cemex of Mexico is the world’s largest ready-mix cement company
• Chinese car manufacturers are trying to compete internationally 
• Even the American beer icon Budweiser has been purchased by a Belgian-Brazilian conglomerate.

Despite the protests of many doomsayers regarding outsourcing and globalization, American companies can and are succeeding in this highly competitive climate.  In fact, many large American companies are discovering how to compete in the backyards of emerging-market countries.  They have learned on the fly how to adapt their products, invent new products, develop a niche product, delegate decision making and absorb host country workers into their management ranks.

The world is flat and getting flatter, especially the business world.  Smart businessmen always stay on top of emerging trends.  This new book is a must read for all individuals involved in the globalization process.