BCG names 100 challengers that are reshaping global industries

NEW DELHI — The Boston Consulting Group has identified “100 global challenger” companies from the emerging markets that are growing so quickly overseas that they are reshaping industries and surpassing many traditional multinational companies.

In Allies and Adversaries, a report published this week, BCG finds that these companies are outpacing household names in the U.S. and Europe and are having a profound impact on the global economy. They come from 17 countries—with companies from Colombia and Qatar joining the list for the first time. Also for the first time, the list includes companies from the financial services, health care equipment, and electronic commerce sectors.

In the past five years, these companies—many of them little known in the West—have added 1.4 million jobs, while employment at the nonfinancial S&P; 500 stayed flat. Their average revenue was $26.5 billion in 2011, the most recent year for which figures are available, compared with $21 billion for the S&P; 500’s nonfinancial companies and $20 billion for the entire S&P; 500. In the same year, they purchased more than $1.7 trillion of goods and services and invested more than $330 billion in capital expenditures.

“If ever there was a wake-up call for business leaders in the West, this is it,” said David C. Michael, coauthor of the report, head of BCG’s globalization practice, and coauthor of a new book called The $10 Trillion Prize: Captivating the Newly Affluent in China and India (Harvard Business Review Press). “We have been monitoring the rise of global challenger companies for nearly a decade, and the ambition of these companies—what we call the accelerator mindset—has never been stronger.”

The report is the fifth in a series of publications identifying the fastest-growing companies in the emerging markets. The first was published in 2006.

Allies and Adversaries is part of BCG’s Game-Changing Program to help leaders and their companies capitalize on the opportunities created by the seismic shifts in the global economy.

The report calls on business leaders in the West to follow the example of other multinationals that are working with this new generation of companies. In one partnership, Dr. Reddy’s Laboratories, an Indian pharmaceutical company known for generic manufacturing, is conducting product development, while Merck, a health care company based in Germany, is handling the manufacturing of generic cancer treatments. In another, India’s Bajaj Auto and Japan’s Kawasaki are jointly marketing products in the Philippines and Indonesia. “Global challengers bring far more to the table than a low-cost structure,” said Tenbite Ermias, coauthor and head of BCG’s office in South Africa. “Multinationals that view global challengers only as low-cost competitors misunderstand their competitive threat and their potential for partnership.”

Twenty-six of the companies are new to the list in 2013, having displaced other companies whose attempts to globalize were met with obstacles. Several of the displaced companies were from the BRIC nations of Brazil, Russia, India, and China. Once home to 84 challengers, these nations now account for 69 companies on BCG’s list.

Also, state-owned and state-controlled companies have struggled to match the success of private companies on the global stage. The number of state-controlled companies on the list has fallen from 36 in 2006 to 26 in 2013. While many of these companies are satisfied with focusing on their domestic markets, others have found it difficult to excel overseas.

“Many state-owned and state-controlled enterprises have not yet cracked the code of global expansion. They need to learn how to attract talent, take risks, and develop business models that work outside their home markets,” explained David Lee, coauthor and a BCG partner based in Hong Kong. “These are things that all companies need to master, and they can be particularly challenging for those affiliated with the state.”