In January 2008 PricewaterhouseCoopers released their Annual Global CEO Survey based on interviews and responses from over 1100 company leaders. The most significant pattern in the report was showing that while company leaders in the developed economies see the economic downturn as the biggest challenge to their business the CEOs of companies in the emerging markets (China, India, Brazil, Mexico, Russia, SE Asia and CEE-countries) remain optimistic. In April 2008 PwC followed up with a special report about companies in the emerging economies. Economists have several explanations to the optimism and growth expectations in these countries including outsourcing trends, stabilising inflation, productivity increase etc. Some economists now even talk about a total decoupling of the ecosystems.
More than half of the sales growth in multinational companies is said to come from the emerging markets. In the next decade more than one billion new consumers will appear in the emerging markets. The report shows that not only does companies in the emerging countries fend off multinational companies from the developed world; they also chose their own path building their own networks and even plan to outsource some of their non-core activities to other companies in other countries. The PwC report describes different strategies for these companies to compete in a more globalizing market.
One strategy described is process driven advantages and more specifically Supply Chain Processes. From being a low-cost supplier to multinational corporations the companies in emerging markets now start to build their own supply chains and supplier networks some even look at outsourcing possibilities. As an example an Indian mobile phone operator outsourced their network management to Ericsson, IT-service to IBM and customer support to Nortel.
One thing that company leaders in both emerging and developed economies regardless of size have pointed out as a top factor for business success is the need for efficient partner collaboration and business networking. CEOs in Asian companies tend to give this more credence than their counterparts in developed countries. The report further shows that most companies have not yet developed a systematic way of developing and capitalizing on networks. It is more ad-hoc and opportunistic than part of the companies business objectives and systems. There is also a lack of understanding of what kind of networks that are possible as well as what tools are available to efficiently work with the networks.
