on August 8, 2012
What can one make of Napoleon's remark "geography is destiny" today? The developed world imposed both the first (1780-1800) and second (1801-2000) epochs of globalization on the emerging markets. The disruptive forces of liberalization (of the closed economies of 1960-80) of Globalization 3.0 have ushered in the phenomenon of EMNCs -around 21,500, estimates the UN's World Investment Report.
Domestic companies' ("DMCs") metamorphoses into EMNCs (113 of Fortune Global 500 in 2010), is turning the world upside down. The ominous words (Business Week "be afraid, be very afraid" and GE Chairman Immelt et al "Siemens, . could never destroy GE; the emerging giants very well could") have proved prophetic. Apple and Samsung's fierce battle for hand phone patent portends the winds of change blowing through the global markets.
The timing of "The New Emerging Market Multinationals:..." is impeccable.
Instead of companies like Gazprom, Petrobas, etc. that rely on monopolies, the book focuses on Haier, HTC (now the world's 3rd largest smart phone company), Natura, LG, Arcelik, etc. from competitive sectors. A quote of one of their interviewees, "a brand first increases the volume and secondly improves the margins. As long ... you have a brand, you have a sustainable business" neatly sums up why the authors focus on global brands and businesses.
The erudition, scholarship and global perspective of Chattopadhyay, Batra and Ozsomer, marketing, branding and strategy experts, are reflected in the persuasive and engaging manner in which the book addresses the questions: What are the reasons they went global? What explains their success? How did they build their global businesses & brands despite limited resources? What TMNCs can learn to develop their own strategies not only to fend off these EMNCs but also to develop their own markets?
Their passion and enthusiasm for marketing & branding are evident while they dissect the phenomenon of EMNCs and destroy popular myths (opportunistic growth, risk-reduction, and learning-not the main reasons for their globalization" the authors instead state, "it is simply that they have the ambition, vision, and confidence to want to become global giants themselves")
A well researched, highly scholarly yet practical, rigorous, backed by diagrams, business models, end notes, secondary studies of published sources, the book has in depth personal interviews conducted by the authors with top the executives of 39 EMNCs in 15 emerging markets across the world.
The authors expertly weave quotes and anecdotes from their interviews in to their narrative to explain various business models and strategies (Global Brand Leader, etc.).
The book excludes Indonesia, Poland, etc. However, PwC`s Report "India may overtake China ..., with over 2,200 DMCs ..over the next 15 yrs- 2010-24" vindicates the authors somewhat skewed emphasis on India. Few floundering EMNCs may have provided interesting contrast and important lessons. Notwithstanding these, the book has great depth and breadth making it truly representative of the EMNC phenomenon.
Globalization being an imperative, DMCs should use the book "to create their own game plans on how resource limitation can be side stepped to become EMNCs". The book will prompt global CEOs of TMNCs "to find new ways to disrupt and fight EMNCs". Policy makers and trade organizations can cull lessons from this book to create conducive policies for their DMCs to turn into EMNCs. The book should prove to be a rich repertoire of case studies for academics and researchers.
Global market witnesses tectonic shifts every few decades; The East India Company followed by British, American, and Japanese in 1980s, and the latest EMNCs. "Born global" (Google, Amazon, etc.) are firmly entrenched. All these put a question mark on Napoleon's remark.
Despite several books of this genre, this easily ranks as one of the best. Anyone wanting to understand the phenomenon of EMNCs should be reading this book.