Description
A strategy presentation on local companies vs global MNC's.
Tomorrow’s global giants
Overview
? Established companies dominate knowledge and
brand intensive businesses ? Local companies hold an adv in industries where production and logistics matter the most.
? What kind of multinational- emerging or
established is going to prevail ? ? Can companies break the above pattern ?
Segment evolution
? Established companies take early lead in high
end , high performance industries
? Local do so in low end and low performance
industries
? The MNC that can quickly follow changing
customer needs will be positioned to invade into others territory
Exploiting segment evolution
? Being close to market helps overcomes product weakness :E.g. :
Taobao vs. Google/Amazon
? Customer knowledge helps spot opportunities to bundle ancillary
services and products – e.g.: suzlon in India
? But market evolution doesn’t always favor the locals :
? MNCs can move into new fast growing segments aggressively ? Use technology and capital to accelerate segment growth
? MNC’s trying to adapt & innovate in a big emerging market have to
display tactical imagination to compensate for the local relationships native customers enjoy- go for partnerships
Managing cost convergence
? Cost advantage no longer stays with the emerging market
challenger- and the change accelerates up the value ladder.
? Established MNCs erode the advantage , forcing locals to
move into higher value offerings and low cost markets
? As locals evolve thus, it opens up markets for MNC at the
low end. – locals move up the ladder, MNCs move down.
? To compete globally? Aggregate knowledge about designing, innovating and
managing across borders
Reworking the value chain
? Emerging players are building global leaderships
positions by creating vertical, focused businesses
? Concentrating efforts on gaps /pockets rather than a
whole industry, often collaborating with MNCs
? Specialize in a certain part of the value chain and
outsource the rest
? Specialization confers competitive advantage on
local companies
Management challenges
Established MNCs
? Work hard at
Local Players
? Lower costs and more fully
coordinating actions and try new management structures and ways of being more responsive ? Slower movement and higher costs and biggest vulnerabilities ? Rapid turnover , freeing up senior management for new positions in developing markets is a problem
? ? ? ? ? ?
adapted to emerging markets Products built around their early successful launches Simple mgmt structure Ability to manage large workforces in one location Low overhead costs Design standard workflows and feedback Vulnerability – inexperience in coordination and conflict management, lack of knowledge depth about global consumer and
What’s the right mgmt structure ?
? P&G’s approach ? Decision makers clearly identified for most
situations ? All Lines of the org receive same info on all business aspects ? Senior people are co located ? Explicit tie breaking rules ? Working for both product group and geographical organization a must to get promoted.
Mgmt challenges – the solutions
? Strategic alliances key to global growth
? Don’t get weighed down by organizational
legacies
Need tighter –knit, faster responding, global management mechanisms and decision making capabilities in order to succeed.
Steps taken on both sides
? Local MNCs using better control systems to track
performance and risk in new markets
? Less centralized decision making ? Greater emphasis on leadership potential in selecting
overseas managers
? More explicit training of overseas hires
? Focus on upgrading, radical experimentation and co-
operating mindset are being practiced to tap expertise on either side.
THANK YOU !
doc_710489492.pptx
A strategy presentation on local companies vs global MNC's.
Tomorrow’s global giants
Overview
? Established companies dominate knowledge and
brand intensive businesses ? Local companies hold an adv in industries where production and logistics matter the most.
? What kind of multinational- emerging or
established is going to prevail ? ? Can companies break the above pattern ?
Segment evolution
? Established companies take early lead in high
end , high performance industries
? Local do so in low end and low performance
industries
? The MNC that can quickly follow changing
customer needs will be positioned to invade into others territory
Exploiting segment evolution
? Being close to market helps overcomes product weakness :E.g. :
Taobao vs. Google/Amazon
? Customer knowledge helps spot opportunities to bundle ancillary
services and products – e.g.: suzlon in India
? But market evolution doesn’t always favor the locals :
? MNCs can move into new fast growing segments aggressively ? Use technology and capital to accelerate segment growth
? MNC’s trying to adapt & innovate in a big emerging market have to
display tactical imagination to compensate for the local relationships native customers enjoy- go for partnerships
Managing cost convergence
? Cost advantage no longer stays with the emerging market
challenger- and the change accelerates up the value ladder.
? Established MNCs erode the advantage , forcing locals to
move into higher value offerings and low cost markets
? As locals evolve thus, it opens up markets for MNC at the
low end. – locals move up the ladder, MNCs move down.
? To compete globally? Aggregate knowledge about designing, innovating and
managing across borders
Reworking the value chain
? Emerging players are building global leaderships
positions by creating vertical, focused businesses
? Concentrating efforts on gaps /pockets rather than a
whole industry, often collaborating with MNCs
? Specialize in a certain part of the value chain and
outsource the rest
? Specialization confers competitive advantage on
local companies
Management challenges
Established MNCs
? Work hard at
Local Players
? Lower costs and more fully
coordinating actions and try new management structures and ways of being more responsive ? Slower movement and higher costs and biggest vulnerabilities ? Rapid turnover , freeing up senior management for new positions in developing markets is a problem
? ? ? ? ? ?
adapted to emerging markets Products built around their early successful launches Simple mgmt structure Ability to manage large workforces in one location Low overhead costs Design standard workflows and feedback Vulnerability – inexperience in coordination and conflict management, lack of knowledge depth about global consumer and
What’s the right mgmt structure ?
? P&G’s approach ? Decision makers clearly identified for most
situations ? All Lines of the org receive same info on all business aspects ? Senior people are co located ? Explicit tie breaking rules ? Working for both product group and geographical organization a must to get promoted.
Mgmt challenges – the solutions
? Strategic alliances key to global growth
? Don’t get weighed down by organizational
legacies
Need tighter –knit, faster responding, global management mechanisms and decision making capabilities in order to succeed.
Steps taken on both sides
? Local MNCs using better control systems to track
performance and risk in new markets
? Less centralized decision making ? Greater emphasis on leadership potential in selecting
overseas managers
? More explicit training of overseas hires
? Focus on upgrading, radical experimentation and co-
operating mindset are being practiced to tap expertise on either side.
THANK YOU !
doc_710489492.pptx