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Some challengers are feeling the pressure as they
expand overseas
RECENT HEADWINDS
From 2012 through 2013,
revenue growth slowed by two-
thirds, a much steeper pullback
than experienced by the
nonfinancial S&P 500
REVENUE GROWTH
At the same time, their
margin slipped and is now
lower than that of the
nonfinancial S&P 500
PROFIT MARGIN
%
13%
3%
17%
6
GLOBAL
CHALLENGERS
NONFINANCIAL
S&P 500
INNOVATION & TALENT
To regain their momentum, global challengers
increasingly will have to develop world-class capabilities
in many areas, especially innovation and talent
From 2008 to 2013, the global challengers increased their R&D
spending four times faster than the top 100 U.S. patent recipients,
but they still have a long way to go to catch up
Many challengers will face acute talent
shortages. In Indonesia, a 40 to 60 percent gap
between demand and supply of middle
managers will exist by 2020
FINANCIAL PERFORMANCE
Emerging markets remain the world’s growth engines
100 18countries
from
companies
Companies within these markets that are riding this wave
of growth and winning by expanding overseas
THE GLOBAL CHALLENGERS
For the first time, the global challengers
include a quick-serve chain and two wine-and-
spirits companies—companies that appeal to
middle-class tastes
Only eight challengers from the 2013 list dropped off, suggesting
greater stability and resiliency
Five previous challengers “graduated” to become global leaders, tied for the
largest number ever
The long-term financial performance
of the global challengers has been outstanding
GLOBAL
CHALLENGERS
From 2000 through 2013, their
revenues grew three times
faster than those of the
nonfinancial S&P 500
ANNUAL
REVENUE GROWTH
During those years, their
average profit (EBIT) margin
was 50 percent higher than that
of the nonfinancial S&P 500
AVERAGE
PROFIT MARGIN
18%
18%
6%
12%
NONFINANCIAL
S&P 500
China
India
Chile ColombiaArgentina
QatarPhilippines
Russia
Mexico
Turkey
Malaysia
South Africa
Indonesia
UAEThailand
Brazil
Saudi Arabia
Egypt
In China, India, Indonesia, and
Brazil alone,
people will enter the middle and
affluent class during those years
730 million
$11 trillion,
Between 2010 and 2020, more
than two-thirds of the anticipated
growth in consumer spending, or
will originate
in emerging markets
2008-2013
R&D spending growth
2013
Average R&D spending
Talent shortage in 2020
Top 100 U.S. patent recipients
Global challengers
* Countries represented on the original 2006 BCG global challengers list
$2.7billion
$270million
FROM GLOBAL CHALLENGERS
TO GLOBAL LEADERS
Read BCG’s latest insights, analysis, and viewpoints at bcgperspectives.com
© The Boston Consulting Group, Inc. 2014. All rights reserved.
To find the latest BCG content and register to receive e-alerts on this topic or others,
please visit bcgperspectives.com. Please direct questions to socialmedia@bcg.com.

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From Global Challengers to Global Leaders

  • 1. Some challengers are feeling the pressure as they expand overseas RECENT HEADWINDS From 2012 through 2013, revenue growth slowed by two- thirds, a much steeper pullback than experienced by the nonfinancial S&P 500 REVENUE GROWTH At the same time, their margin slipped and is now lower than that of the nonfinancial S&P 500 PROFIT MARGIN % 13% 3% 17% 6 GLOBAL CHALLENGERS NONFINANCIAL S&P 500 INNOVATION & TALENT To regain their momentum, global challengers increasingly will have to develop world-class capabilities in many areas, especially innovation and talent From 2008 to 2013, the global challengers increased their R&D spending four times faster than the top 100 U.S. patent recipients, but they still have a long way to go to catch up Many challengers will face acute talent shortages. In Indonesia, a 40 to 60 percent gap between demand and supply of middle managers will exist by 2020 FINANCIAL PERFORMANCE Emerging markets remain the world’s growth engines 100 18countries from companies Companies within these markets that are riding this wave of growth and winning by expanding overseas THE GLOBAL CHALLENGERS For the first time, the global challengers include a quick-serve chain and two wine-and- spirits companies—companies that appeal to middle-class tastes Only eight challengers from the 2013 list dropped off, suggesting greater stability and resiliency Five previous challengers “graduated” to become global leaders, tied for the largest number ever The long-term financial performance of the global challengers has been outstanding GLOBAL CHALLENGERS From 2000 through 2013, their revenues grew three times faster than those of the nonfinancial S&P 500 ANNUAL REVENUE GROWTH During those years, their average profit (EBIT) margin was 50 percent higher than that of the nonfinancial S&P 500 AVERAGE PROFIT MARGIN 18% 18% 6% 12% NONFINANCIAL S&P 500 China India Chile ColombiaArgentina QatarPhilippines Russia Mexico Turkey Malaysia South Africa Indonesia UAEThailand Brazil Saudi Arabia Egypt In China, India, Indonesia, and Brazil alone, people will enter the middle and affluent class during those years 730 million $11 trillion, Between 2010 and 2020, more than two-thirds of the anticipated growth in consumer spending, or will originate in emerging markets 2008-2013 R&D spending growth 2013 Average R&D spending Talent shortage in 2020 Top 100 U.S. patent recipients Global challengers * Countries represented on the original 2006 BCG global challengers list $2.7billion $270million FROM GLOBAL CHALLENGERS TO GLOBAL LEADERS Read BCG’s latest insights, analysis, and viewpoints at bcgperspectives.com © The Boston Consulting Group, Inc. 2014. All rights reserved. To find the latest BCG content and register to receive e-alerts on this topic or others, please visit bcgperspectives.com. Please direct questions to socialmedia@bcg.com.