Looking Past the BRICs

(The Telegraph, 25 January 2012)

In Brief: This article argues that companies are focusing too heavily on booming emerging markets, such as Brazil, Russia, India, and China, and are missing “big opportunities” in other developing countries, such as Colombia, Nigeria, Malaysia, and Kazakhstan.

Our View: As new capital continues to flow into emerging markets, executives are facing a common mandate to globalize (which has gained particular prevalence in the current economic environment). When pursuing emerging market opportunities, our research shows that many companies neglect to address how different corporate center functions–Finance, HR, Research, Legal, and IT–need to adapt. Without sufficient planning and support from the corporate center, companies will burden their market organizations with costly, unresponsive central operations, become exposed to significant risk events, and potentially receive chronically low returns. To overcome this challenge, companies should evolve their corporate center into a “global corporate core” that locates capabilities in centers of excellence around the world to support global expansion.