Last Updated Apr 3, 2008 2:56 PM EDT
But now, the Boston Consulting Group warns that a new breed of fast-growing, local competitors is posing serious new threats to multinational companies seeking growth in rapidly developing economies such as:
The report tells the stories of 50 dynamo companies whose business plans are defying the traditional competitive advantages of global players. It predicts major head-to-head battles within these emerging markets between Western multinationals and these local companies. Here are some examples:
India: Meeting the needs of budget-conscious consumers. CavinKare entered the personal-care market by selling shampoo in affordable sachets to rural customers. Now, with a 16 perecent share of local shampoo sales, it's giving market leaders Hindustan Unilever and P&G a run for their money. Also in India, Titan Industries has become the world's sixth-largest watch maker by producing more than seven million attractive yet affordable watches a year, with the biggest seller going for $25, including a one-year warranty.
Mexico: Selling big-ticket items to people who live on less than $10 a day. Mexican retailing and financial services giant Grupo Elektra started off by offering goods on credit, allowing people with low incomes to afford TVs, washing machines, refrigerators and other important items. Having developed a relationship with its customers, Grupo Elektra very quickly added banking to its list of services. Now the company's vast network of stores doubles as bank branches, where people can withdraw, deposit and transmit cash, as well as get loans.
China: Figuring out how to get around software piracy issues to develop a new kind of gaming industry. Software piracy in
China poses a big hurdle to video-game console makers like Sony and Microsoft, whose business model is based on selling cheap consoles and expensive software. This model doesn't work in China.
Local companies in China have sidestepped the problem by creating an alternative, piracy-proof video-gaming industry based on massively multiplayer online role-playing games, or MMORPGs. This new industry grew 70 percent between 2005 and 2006. One player in that industry, Shanda, also tackled the obstacle of how to get people to pay in a country where e-commerce isn't widely used and credits cards are still a new concept. Shanda enables Chinese gamers to purchase prepaid gaming cards from local merchants.
Brazil: Taking budget airline strategies to new heights. Gol, a Brazilian budget airline, does a lot of what U.S. budget airlines do, like operating a fleet of identical planes. It also takes some extra steps to better serve Brazilian consumers, for whom price is the primary consideration, ahead of convenience and speed. Gol uses multiple-stop itineraries to extend service to previously unprofitable destinations. To fully utilize planes, it schedules flights late at night and early in the morning, as well as throughout the day. Gol's planes fly at nearly 80 percent capacity.
Multinationals of the world, get ready to rumble!