100 companies from fast developing countries close to joining ranks of multinational elite. - According to a report from management consulting firm the Boston Consulting Group (BCG), 100 companies from rapidly developing economies are fast joining the ranks of the multinational elite. In its newly published report, “The 2009 BCG 100 New Global Challengers”, the Boston Consulting group identifies 100 companies which are about to change the world's competitive landscape because of their rapid expansion and remarkable performances. BCG identified these companies after an in-depth study of over 3,000 companies from the emerging economies using quantitative and qualitative criteria such as the size of the company and their last three years' financial data. Examining the reasons behind the success of these new challengers and their ability to adapt to the growing constraints related to the global economic crisis, the BCG notes that, if 2008 was a difficult year for the hitherto dizzying growth of some, the trend, although slower, continues, as shown by the 19 new challengers which have just joined the list and seem to have all the assets to grow rapidly and challenge Western multinationals. The report says that: 1) the 100 companies are catching up with, or have already overtaken, their rivals in the United States, Europe and Japan; 2) the combined 2007 revenues of the 100 challengers amounted to $1.5 trillion; and they carried out a total of 88 international mergers-acquisitions in 2007; 3) the countries featuring on the list are becoming more varied, but China still dominates, with 36 companies, followed by India (20 companies), Brazil (14), Mexico (7) and Russia (6); of the 19 new companies on the list, 5 are from the Gulf States, a new region on the list; 4) there is also great diversity by sector: natural resources and metallurgy are the biggest group with 20 companies, and there are also a significant number of companies from the food and beverage industry (13) and carmakers and component suppliers (10); 5) in addition to some widely known names, such as Lenovo (China) and Tata (India), the list also contains some lesser known companies, such as Agility (Kuwait), one of the world's top 10 logistics services providers, and Dalian Machine Tool Group, China's largest machine tool company. David Michael of BCG, noting not only the size but also the speed of the success of these challengers said: “For those who make the right moves quickly, the challengers could become clients, suppliers, and even strategic partners. For those who don't, the challengers will represent fierce competitors”. He noted three assets that the challengers share at the outset: 1) a competitive advantage at the start, whether privileged access to raw materials, cheap labour or no great administrative burden; 2) the ambition to become a world leader (prepared to take risks, cost of capital seen as low or good protection against hostile takeover bids); 3) a rapid exogenous growth strategy, through technological or distribution partnerships or through international mergers-acquisitions. After excellent performances from 2005 to 2007 (29% average annual revenue growth), the new challengers have suffered the damaging effects of the global downturn, but have reacted better than their Western counterparts: geographical diversification, optimising their supply chain, improving productivity, passing costs on to others where possible and seeking government support. In conclusion, to resist the pressure from the challengers and make the best of the crisis, the BCG recommends that Western multinationals remain vigilant to the competitive upsets in their sectors, protect their activities by capitalising on their assets, such as innovation and branding, make the most of opportunities offered by merging countries to improve their cost structure and adapt their business model to take account of their presence in these countries. (I.L./transl.rt)