Emerging market multinationals It has for some time been a truism that if you want to Wedding Dresseswww.8eze.com see the division of world power, you need to look beyond the map of nationstates.A slew of multinational corporations have annual gross incomes that exceed the gnp of entire nations.Moreover, though they don't have a seat at the united nations, these corporations arguably wield much greater power than many nations on the world stage. The familiar story of the rise of multinational corporations focuses on the usual suspects:Longstanding powerhouses, mostly based in the united states and western europe, like walmart, ibm, general electric, exxon, bp and volkswagen.Japan's massive postwwii investment in modernization allowed it to become a leader in the automobile and electronics industries. In the last twenty years, that storyand the multinational map of corporate power, as it werehas undergone a fundamental shift:Away from established companies in the developed world and toward ambitious upstarts Party Dresses Australia in the developing world. When forbes first published its global 2000 list in 2003, the united states, japan and the united kingdom dominated.By 2012, emerging markets had broken that stronghold in a big way, in many cases leapfrogging established players like at gulfstream and sara lee.Emerging market multinationals(Emms)Are now at the top of markets as varied as household appliances, readymix concrete, seamless tubes for oil drilling, regional jets, meat, bread and candy.Yet recognition of this trend has been spotty at best.In 2010, for example, the chinese battery and electric automaker byd topped bloomberg businessweek's tech 100 list.Warren buffett was so impressed he took a 10% stake in the company.Yet a march 2012 search of the previous year turned up only one mention in the new york times, while the 98thranked firm, californiabased vmware, showed 1, 100 results for the same period.The term was first coined in 1981 by economists at the international finance corporation.In sum, it denotes countries and markets playing catchup:Nations with an undeveloped industrial base and infrastructure on the one hand, but a rapid rate of growth(Usually exceeding that of developed nations)On the other hand.In addition, emerging markets are often distinguished by some level of political and institutional instability, and ongoing demographic growth. Definitions aside, the dramatic surge of emms certainly represents a sizable geopolitical shift.Yet just as significant as the fact of companies in developing countries asserting global dominance are the methods by which they have done so.This is a revolution not just in who but in how.Emms have made their mark by moving boldly, swiftly, strategically and often stealthily;By nimbly negotiating the often volatile political and economic landscapes of other emerging markets;And by treating joint ventures and other initial forays into acquisition and expansion as learning experiences. Guilln and garcacanal suggest a number of reasons why emms as a group seem to exhibit a different approach, and an entirely different institutional culture.Most of these companies, and their owners, cut their teeth in environments characterized by political and institutional instability, and a range of limitations in infrastructure, technology and capital.Early on, they learned to make more out of less and to be comfortable with risk, volatility and uncertainty.As well, many are either family or governmentowned, are free from the secondguessing of stockholders, and thus able to keep their eyes on the longterm prize, even if their strategy results in some shortterm bumps in the road. Based on their 20year study of emms, guilln and garcacanal have distilled seven"Axioms"That for them define the 21st century way of global business.None is more important than the first: "Execute, strategize, then execute again. "These simple words imply two of the book's central themes:That execution is of primary importance and that the best strategy emerges organically from practical experience on the ground.Not only do managers"Agonize"Over formulating the perfect strategy;Once they think they've found it, they become infatuated with it, clinging to it even in the face of rapidly changing circumstances.They cite benetton and matsushita as"Examples of companies with strategizing run amok. "Benetton, a trendy italian clothing designer, launched a number of highprofile, edgy campaigns in an effort to crack the american market all incomplete successes at best.The japanese electronics firm matsushita(Now known as panasonic)Developed a once highly touted 250year strategic plan but then lost ground in the marketplace due to insufficient attention to detail. By contrast, the mexican company bimbo challenged and eventually overtook established power sara lee in the bread business through relentless attention to operational detail.Faced with an uphill battle, the mexican upstart knew its only chance was to win the battle of execution.Because bread is a commodity in which freshness and timing are of the essence, bimbo computerized its distribution network in a way sara lee never had.On the other hand, in expanding to china, the company deployed tricycles in order to make timely deliveries to older parts of town with streets too narrow to accommodate trucks.Bimbo executives aggressively embraced a trialanderror approach in their expansion to china and other markets a process, in the words of one manager,"Full of learning, unlearning, experiences, challenges and failures. "Guilln and garcacanal call this"Strategy wrapped around implementation.You execute to figure out what strategy works, and then you pursue it relentlessly by focusing on execution itself. " The trojan horse of niche markets Harkening to the guerilla tactics first set out in sun tzu's the art of war, guilln and garcacanal view highly targeted niche markets as a kind of stealth weapon allowing emerging market upstarts to gain a toehold in the competitive and often more saturated markets of developed countries.Established companies, they say, often neglect or fail to adequately serve these narrow markets.Having dismissed such markets as of marginal importance, they are not alarmed when a hungry overseas competitor sets up shop in their own backyard by entering an underserved niche. "They see an annoying gnat, not a trojan horse using the path of least resistance to take over the stronghold of an established brand. " The chinese appliance manufacturer haier, for example, cracked the american market by catering to the niche market of college students looking for compact refrigerators.They then moved on to wine coolers and other highly specific lines.As recently as 2006, the head of whirlpool's north american region didn't see haier as having"Any perceivable position"On its home continent.Today, haier sells its entire product range in the united states, has a major manufacturing facility in south carolina and is the world's largest household appliances brand. Like haier, other emms have used niche markets as steppingstones to a mainstream mass market.Moreover, even though a narrow market in just one country may be marginally profitable at best, the numbers turn favorable when serving that same niche across many national markets.Market through corona extra, its entry into the very specific niche of light import beer a market segment over which heineken held a virtual monopoly.Initially targeting college students and mexican immigrants, modelo quickly boosted sales from 1.8 million cases in 1984 to 13.5 million in 1986.The company then went global with this strategy, and corona extra is now the numberone import beer in china, india, japan, australia and the united states, among others.In 2008, the company purchased anheuserbusch, and today mexico has surpassed both the netherlands and germany to become the world's top beer exporter. To some extent, oldline multinationals were accustomed to simply imposing their will on the market.They allow the market and not just the market in a macro, impersonal sense, but in the form of the wildly variable and often unpredictable needs and desires of individual customers to dictate strategy. The enthusiastic embrace of niche markets is only one way emms have learned to follow the market.Haier is again a model of this philosophy, taking the above motto of its ceo to heart in one of the book's most telling anecdotes.Back in the 1990s, when the company was still focused exclusively on the domestic market in china, haier's service division ran into a recurring problem:Its washing machines were breaking down because customers were using them not only to wash clothes, but also to rinse potatoes and vegetables.Instead of trying to"Educate"Its customers about the"Proper"Use of the machine, haier identified a need and responded to it designing a specific, dualuse model for that customer base. Suzlon of india listened to the market in a different way.Founded as a textile company, the company grew tired of the erratic and inefficient 8eze service provided by india's stateowned electricity network.It began looking into developing its own windpower generators and, with no background or expertise in the field, had to learn the technology from scratch.Recognizing the huge potential in the market for alternative energy, it sold off its textile business in 2001 and is now exclusively devoted to the development of wind farms.Suzlon has risen to the top of the market in india, is number two in the united kingdom and third in france and germany. Upstart emms have managed to leapfrog entrenched companies, not through cautious and incremental growth, but by thinking big and acting boldly.A number of them have spent years and even decades consolidating their position in their home countries.But when they made the move to go global they have done so at near lightning speed, and with a varied attack utilizing vertical integration, joint ventures, rapid expansion and strategic acquisitions.By contrast,"Even after entering foreign markets, oldline multinationals tended to escalate their commitment of resources slowly. " Samsung electronics of south korea exemplifies a bold and swift commitment to scale.Founded in 1969 as a subsidiary of the larger samsung group, its early years were devoted to manufacturing contracts outsourced by american brands.In the mid1970s, samsung moved aggressively into the semiconductor business, thereafter focusing on its own brands and proprietary technologies.In each market it has entered, it has scaled rapidly.The company started making batteries for digital devices in 2000;Ten years later it was the global leader.In 2002, samsung invested in the manufacture of the flashmemory chips that drive iphones and ipads;In less than five years, it Mermaid Wedding Dresses was apple's top supplier.By the end of the decade, the company's revenues had surpassed those of rivals panasonic and sony.A top executive describes the key to samsung's success as"Aggressive investments and faster decisions. " In telecommunications, mexico's amrica mvil also grew boldly and swiftly, employing acquisitions as a key part of its expansion strategy.Its founder, carlos slim, had been a businessman in mexico since the mid1960s.Multinationals at low prices, generating cash flow that allowed slim to move into telecommunications in 1990 when the government privatized its national telecom monopoly, telmex.Now, slim put his foot on the gas.He focused on the hugely untapped domestic mobile phone market, spinning the wireless business off as a separate entity, amrica mvil.In 2000, he expanded his company's presence to the entire region by buying up the latin american assets of a number of multinationals, including american giants at and verizon.Later, he took advantage of the crisis in the euro and grabbed a controlling stake in telecom companies in holland and austria.In march 2012, forbes declared slim the world's richest man, with an estimated net worth of $69 billion. Whether through acquisition or other means, emms have often been able to expand swiftly in other emerging markets because of their greater comfort with high levels of risk and volatility.Orascom, a telecommunications company based in egypt, learned early on how to negotiate the tricky politics of its home nation, and was later able to transfer those skills to emerging markets that established multinationals tended to shun.Since 2000, the company has ventured into a range of global hotspots including jordan, pakistan, zimbabwe, algeria, iraq, namibia and lebanon.Moreover, the company recognized that the lack of a developed telecommunications infrastructure in these countries was in many ways an asset:Because fixed lines weren't an established fact in many areas, demand for mobiles caught on more quickly than in the developed world. While upstart emms happily embrace risk, they are also savvy enough to make a play for the global market via a product line they can master quickly:Another example of choosing the path of least resistance.China's byd, for example, established a global presence through the market for computer and cellphone batteries.In 2003, the company bought a controlling stake in a derelict stateowned automaker and applied its expertise in batteries to researching an efficient and economical electric car.By the end of the decade, their auto division was the sixth largest in the rapidly growing chinese market, and warren buffett, after buying a 10% stake in the company, stated that byd had an excellent chance to eventually become the world's largest automaker.Its chairman recognized the opportunity inherent in the relative simplicity of electric cars, which comprise only 210 primary parts as compared to 1400 for a gaspowered car. "It's almost hopeless for a latecomer like us to compete with gm and other established automakers with a century of experience in gasoline engines,"He noted. "With electric vehicles, we're all at the same starting line. " The book's final chapter is devoted to summarizing the methods by which so many emerging market multinationals have challenged more entrenched firms for global dominance and to discussing how companies seeking to enter world markets might learn from their example.They list the big lessons: "Executing before strategizing, catering to the niches, scaling to win, embracing chaos, acquiring smart, and expanding with abandon. " More than a set of techniques or strategies, the emm way of doing business is an entirely different way of looking at the world.Where some view globalization as producing a standardization of tastes, emms see a proliferation of niche markets.Where oldline firms view acquisitions as trophies, emms see them as opportunities for learning and crossfertilization.As guilln and garcacanal sum it up: "What began as a necessity a kind of guerillabusiness warfare against the corporate superpowers has now evolved into best practices and is on its way to becoming what everyone needs to know. "

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