RGMs: drivers of global recovery
Business is steadily gaining momentum in RGMs. Though still uneven, the pickup in activity that began at the end of last year is becoming the driver of global recovery, even as developed economies continue to lag.
At last, there are signs that stability could be returning to the global economy. The risks to growth are receding and the world economy is increasingly influenced by RGMs.
For directors and executives charged with shaping investment policies, decisions are becoming more urgent.
Only the very biggest global companies have the luxury of established global reach. Chiefs of other companies with international aspirations need to weigh where they should focus limited resources, and carefully match corporate potential with the diverse opportunities offered by our selection of 25 RGMs.
Resurgence in the global environment
Almost all the RGMs we survey are growing, and many are accelerating. Their progress is powered by an expanding middle-class and the development of the private sector.
Simultaneously, trade is increasing:
- Between neighboring countries
- Between RGMs
- Between RGMs and developed economies
This is aiding economic growth everywhere.
Making it here, making it there
To identify the new opportunities that are becoming available, firms need to constantly scan for changes that enable them – or their competitors – to operate more effectively, or at lower cost. They need to be close to RGMs’ customers, whether businesses or consumers.
They also need to recognize ways in which logistical and technological changes facilitate new business models between countries and regions.
Companies committed to RGMs do not have to succeed in a BRIC economy before rolling out their products or services elsewhere. Indeed, there are many advantages to experimenting in a smaller country, and perfecting bottom-of-pyramid business models in smaller, more homogenous markets before seeking to scale them up or transfer them elsewhere.
Being successful in one country, with a particular business model, does not automatically qualify a company to succeed in its neighbor. It also does not mean that success can be automatically transferred to a different region in the world, even if the markets seem alike.
Companies weighing where best to invest will need to carefully consider:
- The nature of their customers
- Their costs
- The extent to which labor availability might affect wages in future
Gaining in-depth knowledge of markets is then the first step. Which offer the best prospects, and why?
Once they have a clear view of where their best prospects lie, companies need to review their:
- Go-to-market strategies
- Production and supply chain