Multinationals in emerging markets: Must try harder

SPEAK to the boss of a big, rich-world multinational company and he will soon wax lyrical about the attractions of emerging markets. Even recent wobbles in some of these countries have not curbed vocal enthusiasm for the BRICS and other collections of high-growth markets, whose prospects have more than offset a gloomy prognosis for the maturing, growth-starved domestic markets of the developed economies. So, with the source of future profits so clearly identified, presumably such firms are doing everything possible to succeed in emerging markets?Strangely, it seems they are not. Or so says a new report, “Playing to Win in Emerging Markets”, by the Boston Consulting Group (BCG). The consultancy polled over 150 executives from the world’s biggest multinational companies. So far, those firms have not done badly, earning on average 28% of their revenues in emerging markets. Yet nearly four-fifths of them expect to gain market share, which could be trickier.Many multinationals base their entire senior management team at home, where they are too remote to tackle the challenges involved in conquering new territories. Those firms that have moved at least two…

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