Companies from rapidly developing economies (RDEs) are globalizing so quickly that they pose an urgent threat to industry leaders, The Boston Consulting Group (BCG) warns in the second edition of its report on 100 of the most formidable companies from RDEs. The report -- titled "The 2008 BCG 100 New Global Challengers: How Top Companies from Rapidly Developing Economies are Changing the World" -- is being published today.
"Industry leaders need to understand these new rivals and act quickly," urges David Michael, the report's coauthor and a Beijing-based BCG senior partner. "For those who move fast, the challengers could become key clients, suppliers, and even strategic partners. For those who don't, the challengers will represent fierce competition and, in time, become potential acquirers."
By many measures, the BCG 100 New Global Challengers are already outperforming established industry leaders. In the past five years, the Challengers grew revenues faster than the S&P 500 -- in fact almost three times as fast since 2004 -- earned a higher average return on sales, and created far more shareholder value. "The challengers are increasingly looking for acquisitions abroad," said report coauthor and BCG partner Arindam Bhattacharya. "In 2006 they completed 72 outbound acquisitions, up from 21 in 2000. The average size of these transactions grew from $156 million in 2001 to $981 million in 2006."
