El desafo de ser global desde Latinoamrica

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El desafío de ser global desde Latinoamérica
Endeavor CEO Summit Gerardo Garbulsky Partner
Managing Director Buenos Aires, 14 de mayo de
2008
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What do these companies have in common?
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All global leaders All from RDEs Many still
not well known
1 batteriesChina
1 microwave ovensChina
1 instant noodle flour processingIndonesia
1 piano manufacturerChina
1 ready-mixMéxico
1 aluminum engine castingsMéxico
1 polyester fiberIndia
1 small electric enginesChina
1 marine containersChina
1 regional jetsBrazil
1 third-party engineering svcsIndia
1 LNG shipperMalaysia
1 iron ore pelletsBrazil
1 nickel productionRussia
1 gas producerRussia
1 oil producer Saudi Arabia
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"The 2008 BCG 100 New Global Challengers" report
features 100 top companies from rapidly
developing economies (RDE)
Key questions addressed in 2008 Report

• Who are the emerging RDE-based new global
  challengers?
• Why are they globalizing?
• What are their globalization models?
• How do they perform?
• What challenges do they encounter?
• How do they engage in MA?
• What roles are played by states?
• What are the implications for both the New Global
  Challengers and incumbents?

Source http//www.bcg.com/impact_expertise/public
ations/publication_list.jsp?pubID2495
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Global Challengers represent 14 countries and
many industries

• Argentina
• Brazil
• Chile

• China
• Egypt
• Hungary

• India
• Indonesia
• Malaysia

• Mexico
• Poland
• Russia

14 Countries

• Thailand
• Turkey

• Including
• Shipping (5)
• Telecom networks (4)
• IT services/BPO (4)

Other (13)1
Other (21)
Russia (6)
Mexico (7)
Food and beverages and cosmetics (14)
Brazil (13)

• Including
• Home appliances (6)
• Consumer electronics (6)

Consumer durables (14)
India (20)

• Including
• Fossil fuels (9)
• Metals (5)

Resource extraction (17)

• Including
• Automotive equipment (12)
• Steel (6)
• Engineered products (6)

China (41)
Industrial goods (34)
Sources BCG 100 database BCG analysis. 1Argentin
a (1), Chile (1), Egypt (1), Hungary (1),
Indonesia (1), Malaysia (2), Poland (1), Thailand
(2), and Turkey (3).
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The BCG 100 Challengers have generated superior
shareholder returns
Total shareholder return index, Dec. 31, 2001 to
June 19, 2007
Changes since Dec. 31, 2001 ()
CAGR1 ()
Total index as of June 19, 2007
TSR index (Dec. 31, 2001100)
35.1
RDE100
417.7
517.7
MSCI Emerging Markets
23.8
220.7
320.7
SP 500
7.4
47.3
147.3
Dec. 31, 2001
June 19, 2007
1The CAGR during Dec. 31, 2001 to June 19, 2007,
calculated for a period of 5.46 years. Sources
BCG analysis Data Stream. Note The TSR index of
RDE challengers is based on 64 RDE companies or
their subsidiaries listed in Bombay, Budapest,
Cairo, Hong Kong, Mexico, Milan, New York,
Russia, Santiago, Sao Paulo, Toronto, and Warsaw.
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For the first time, global investment flow into
RDEs has changed direction
Developing nations targeted by developed nations
US B
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1. Through Sep 10th Source Dealogic AWSJ
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The Number of Outbound MA Deals Concluded by BCG
100 Challengers Has Accelerated In The Past Decade
of deals
MA deals from 1988 to 2006 (n374)
2001-2006 28 CAGR
Sources BCG 100 database Thomson Financial
Securities Global Mergers and Acquisitions
Database.
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Tres preguntas para este panel

• Por qué las empresas de América Latina tienen
  que crecer más allá de sus fronteras originales?
  Todas tienen que hacerlo?
• Cuáles son las posibles estrategias para
  hacerlo?
• Cuáles son los desafíos de la implementación?
  Cuáles fueron los aprendizajes de haber
  recorrido mucho de este camino en vuestras
  experiencias personales?

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Why do these challengers globalize ?To access
new profit pools and to secure vital resources
Two Main Motives ...
... And Some Related Drivers

• To escape home market commoditization
• To gain sufficient scale
• To utilize overcapacity
• To tap potential demand for own products
• Access to technology and brands
• To move closer to existing customers
• To diversify the revenue base

Gaining access to new profit pools
Reacts to constraints
Pursue opportunities
90
Companies

• To remain / become costleader
• To support national interest (because reserves in
  the home country are limited - active government
  support)

Securing supplies of raw materials
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Companies, 8 Chinese
Ultimately, companies globalize to create
sustainable advantage and shareholder value
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What it takes to succeed the challenges most
RDE companies need to master (I)
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Establish clear globalization roadmaps

• Define long-term globalization goals (what,
  where, why)
• Translate strategic goals into actionable
  roadmaps

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Create international management

• Hire internationally experienced managers from
  competitors
• Recruit high-potentials out of returning
  overseas student

3
Enhancegoing-to-market capabilities

• Develop overseas market and customer know-how
• Build-up effective channels and marketing
  capabilities

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What it takes to succeed the challenges most
RDE companies need to master (II)
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Go beyond low cost

• Invest into RD and strengthen innovation
• Develop intellectual property and seek patent
  protection

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Develop expertise in MA and partnering

• Learn to identify targets and conduct MA and
  PMI
• Leverage strategic partnerships to foster growth

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Build an effective global organization

• Define an adequate mix of central and decentral
  functions
• Redesign the entire organization in the long term

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Who can afford to ignore Challengers and Dynamos?
Jeff Immelt isnt making that mistake. Last fall
he took a list created by Boston Consulting Group
of the 100 most important companies in developing
economies and arrayed it into four camps
customers, suppliers, competitors, and
nonaligned. I tell my leadership team, Our
goal for this group is to have lots of customers,
lots of suppliers and no competitors, he
says Fortune July 07

In our business the challengers will never be
able to catch us as we are driven by
innovation COO of a global chemical
company.
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El desafío de ser global desde Latinoamérica
Endeavor CEO Summit Gerardo Garbulsky Partner
Managing Director Buenos Aires, 14 de mayo de
2008