Half of the 430 global companies recently surveyed by Global Intelligence Alliance (GIA) say at least 30% of their global revenues will come from Emerging Markets by 2017.
Helsinki, Finland, June 29, 2012 –(PR.com)– Half of the 430 global companies recently surveyed by Global Intelligence Alliance (GIA) say at least 30% of their global revenues will come from Emerging Markets by 2017. Yet nine out of 10 admit that they could have done something better in their Emerging Markets strategy, according to GIA’s Business Perspectives on Emerging Markets 2012-2017 Report.
The consultancy says that the motivations behind many global companies’ Emerging Markets strategies have evolved but very real concerns remain.
• Most companies see a presence in Emerging Markets as necessary to their future success, and are investing now to gain a foothold and build global market share. It has become less about lower production costs, though this is still a driver for some.
• BRIC countries are still seen as the top four Emerging Markets for 2012-2017, but interest in Russia is lagging behind Brazil, India and China.
• Most of the non-BRIC Emerging Markets that international companies plan to target in 2012-2017 are in Asia or Latin America. Indonesia is the next upcoming Emerging Market, with over a quarter of companies naming it fifth after the BRIC countries. South Africa, Vietnam, Mexico and Turkey follow.
• The biggest threats to succeeding in Emerging Markets are bureaucracy and corruption, followed by competition from both local and foreign companies.
• Over half of the respondents say that information on Emerging Markets is not always readily available in their organizations, with three out of four doubting the accuracy and completeness of the information that they do have.
The top tips from international companies operating in Emerging Markets are: adapt sufficiently to local conditions and pricing, to enter as soon as you can and to conduct good market intelligence and due diligence.
“International companies’ reasons for investing in Emerging Markets can be complex. The motivations usually revolve around the potential for building long term revenues and global market share more rapidly than in established markets – whether this is driven by the emerging markets’ overall addressable market size, speed of economic development, current low product penetration levels, or simply that the company has not yet entered these markets. In a second wave of investment, lots of companies are following their major customers into emerging markets. Despite the general emphasis on long term growth, about a quarter of the companies we spoke to expect to make short term gains. Some of them may be disappointed – though in many countries, problems with local partners, poor infrastructure and political risk are much less severe now than they were in the past,” said Pete Read, head of Strategic Analysis & Advisory at Global Intelligence Alliance.
“Over the past decade Asia has become the clear favorite region for future revenue growth, with three out of the top five targeted Emerging Markets in the region. Nine out of the top 15 Emerging Markets are also in Asia Pacific. In reality though, markets such as China, India, Thailand and Korea differ from one another almost as much as they do from countries in other regions. Local intelligence is critical to successful emerging market strategies,” continued Read.
“Half the respondents say at least 30% of their global revenues will come from Emerging Markets by 2017. With this study, we are pleased to share the strategic ambitions, concerns and challenges facing companies with fast growing market opportunities,” said Markko Vaarnas, CEO, Global Intelligence Alliance.
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About Global Intelligence Alliance
Global Intelligence Alliance (GIA) is a strategic market intelligence and advisory group. GIA was formed in 1995 when a team of market intelligence specialists, management consultants, industry analysts and technology experts came together to build a powerful suite of customized solutions ranging from outsourced market monitoring services and software, to strategic analysis and advisory.
Today, we are the preferred partner for organizations seeking to understand, compete and grow in international markets. Our industry expertise and coverage of over 100 countries enables our customers to make better informed decisions worldwide.
About the Business Perspectives for Emerging Markets 2012-2017 Report
In April-May 2012, Global Intelligence Alliance (GIA) conducted an online survey amongst business managers at 431 large and mid-sized companies and organizations worldwide, with questions such as:
• How do you define Emerging Markets in your company?
• Which are the top Emerging Markets for your industry over the next five years?
• What key factors will determine whether foreign companies succeed in Emerging Markets?
• What are the biggest threats to succeeding in Emerging Markets?
• What are your company’s main reasons for investing in Emerging Markets?
• What share of your company’s global revenue do you expect to come from Emerging Markets?
• Which one aspect of your Emerging Markets strategy would you go back and change if you could?
Industries covered include: Manufacturing & Industrial; Telecommunication, Technology & Media; Professional & Business Services; Financial Services; Consumer & Retail; Pharmaceuticals & Healthcare; Energy, Resources & Environment; Automotive; Chemicals; Logistics & Transportation.
Respondents: Nearly half (42%) of the companies in the survey earned more than $1.3 billion (1 billion Euro) in annual revenue and more than 50% (58%) have more than 1,000 employees. The respondents’ job functions included strategic planning/business development (26%), market/competitive intelligence (23%), senior management (19%), sales and marketing (13%), research and development/product management (9%), among others.
Global Intelligence Alliance Group