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New Global Challengers

Mark Marich

One offshoot of globalization has been the emergence of world-class businesses in less developed economies. These firms are no longer “junior partners,” but major global players in their own right.

The latest Boston Consulting Group analysis of “New Global Challengers” identifies 100 companies with the potential to become household names across the globe.

The companies work in a variety of sectors, and hail from a host of countries. Not surprisingly, Brazil, China, and India account for the biggest portions of the list. The list is also very volatile, as 19 new companies made this year’s list. What explains the emergence of these new global challengers? The report, The 2009 BCG 100 New Global Challengers, also depicts a common growth path for many of these firms. In their early stages, they benefit from privileged access to local markets and low cost labor pools. They are also extremely ambitious, with strong desire to capture global market share. They also benefit from a relatively lower cost of capital, and a concentration of ownership, which helps fend off potential hostile takeover attempts. As growth accelerates, these firms are willing to reach outside and bring in other expertise--often through global alliances, acquisitions, and by building management teams with a global perspective.

Like most companies, firms on the BCG 100 list have faced a tough year in 2008. But, in prior periods, the group has enjoyed robust average annual growth of 29 percent between 2005 and 2007.

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