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http://www.economist.com/news/business/21569679-giant-emerging-market-firms-continue-advance-everywhere-best-sliced-bread

Schumpeter

The best since sliced bread

Giant emerging-market firms continue to advance everywhere

Jan 19th 2013 |From the print edition 

[1] GRUPO BIMBO is on the prowl in el Norte again. In 2009 the Mexican baking giant bought part of Weston Foods for $2.3 billion, becoming the biggest baker in the United States. Two years later it bought Sarah Lee’s American baking operations for $960m. In the past month it has been in a battle over the tastiest bits of Hostess Brands’ bread business, as that once-iconic and now-bankrupt company winds up its affairs.

[2] Bimbo brings more than a shopper’s eye to its expansion. It is a master at bread-related breakthroughs. It helped introduce Spaniards to sliced loaves and pioneered the packaging of bread in clear cellophane. It is also a master of efficiency and logistics: Bimbo lorries with their teddy-bear logo are familiar sights in Mexico and Central America. The combination of savvy dealmaking and relentless cost-squeezing has made Bimbo a behemoth of baked goods, with $10.8 billion of sales in 2011.

[3] Together the emerging-market countries now have more than 1,000 firms with annual sales above $1 billion. Many are content to stay at home—after all, their markets are growing at least twice as fast as the rich world’s. But some, like Bimbo, are determined to venture abroad, invading foreign markets and buying foreign companies. They are sharpening old skills and acquiring new ones. And in the process they are reconfiguring entire industries.

[4] The Boston Consulting Group (BCG) has been producing an annual study of the top 100 such “global challengers” from emerging markets since 2006. To qualify, besides having revenues above $1 billion, challengers must have a broad global footprint, with foreign revenues equal to at least 10% of the total, or $500m. Their global aspirations must also be credible, as measured by a combination of objective criteria and a poll of industry experts. BCG’s 2013 list provides an unusually sharp insight into what Marxists called “the correlation of forces” in the global economy as it begins to recover from the financial crisis.

[5] First, the new list is notable for its variety. In 2006 it was dominated by 84 companies from the four BRIC countries—Brazil, Russia, India, China—including 44 from China alone. In 2013 it includes firms from 17 countries, up from ten in 2006, and only 30 Chinese ones. In 2006 the list was dominated by heavy industries. Today it looks more consumer-oriented, with firms in financial services (China UnionPay), e-commerce (Alibaba Group, also Chinese), health care (South Africa’s Aspen Pharmacare) and food manufacturing (Indonesia’s Golden Agri-Resources).

[6] Also, the challengers are no longer simply competing on price. They are investing in innovation: almost half of the 150,000 staff at Huawei, a Chinese electronics firm, work in research and development. They are producing new business models: Alibaba has overcome the main problem in online selling—low trust—by creating an escrow-payment system, Alipay. They are gobbling up foreign firms, to acquire new skills or enter new markets: LAN, a Chilean airline group, has bought TAM of Brazil to create South America’s biggest carrier, LATAM; Aspen Pharmacare recently bought 25 brands in Australia from GlaxoSmithKline.

[7] What is also striking in the latest league table of emerging-market challengers is that the number of state-controlled firms has slipped from 36 in 2006 to 26 now. It is too early to pronounce the death of state capitalism: there are after all nine new state firms on BCG’s latest list. But some may have realised that they have a comparative advantage only in their home market. Some may have been ordered to return by their state owners, for reasons of domestic politics. Others have retreated after failing to crack foreign consumer markets, or losing out to nimbler private companies in takeover battles.

[8] Still, emerging-market multinationals are advancing on all fronts against their Western rivals. They are seeking a lock on other developing economies: Chinese contractors control 37% of Africa’s construction market, for example. They are pushing into the rich world too: Alibaba has been buying e-commerce sites in America. And they are forging alliances with each other, such as the ones Naspers, a South African media group, has with Russian and Chinese internet firms.

Reddy’s, steady, go

[9] For the rich world, such emerging giants represent opportunity and growth as well as competition and disruption. For a start, they employ lots of Western workers. Tata Group of India employs 45,000 people in Britain (and announced 800 new jobs at Jaguar Land Rover, its luxury-car maker, this week). Wanxiang, a Chinese maker of car parts, employs 6,000 in America.

[10] Emerging-market multinationals are big customers for rich-world firms: Huawei bought about $6.6 billion-worth of parts from American companies in 2011. They are injecting a huge amount of dynamism into the world economy: besides buying $1.7 trillion of goods and services each year, they collectively account for $330 billion in capital spending. They can make good partners too. DuPont of America has formed a joint venture with the China National Chemical Corporation to share skills. Merck of Germany has struck a deal with Dr Reddy’s Laboratories of India to develop cheap versions of cancer treatments whose patents are expiring; in a twist to the normal pattern, Dr Reddy’s is doing the product development and testing, and Merck is doing the manufacturing.

[11] The top ranks of the emerging-market multinationals are a more volatile bunch, thus far, than their Western peers. Only half the companies that appeared on BCG’s original list in 2006 appear on the latest version. But there is no doubt that there are plenty more would-be giants waiting to take their place—and that these will be even more sophisticated and ambitious than those who came before them.

Economist.com/blogs/schumpeter /// From the print edition: Business

http://www.economist.com/news/business/21569766-social-networks-shares-recover-it-fixes-its-search-problem-search-me

Facebook

Search me

The social network’s shares recover as it fixes its search problem

Jan 19th 2013 | SAN FRANCISCO |From the print edition 

[1] MARK ZUCKERBERG is trying to spice up things online with some pillar talk. Unveiling a revamped search engine on January 15th, the boss of Facebook referred to it as the “third pillar” of the social network alongside its timeline, which lets individual users post what they have been up to, and its news feed, which lets them see what their friends are doing. Facebook’s search offering has long been so dire that any improvement to it is a welcome relief. But the company will have to do much more in future if it wants to mount a serious challenge to Google’s dominance of the online-search business.

[2] This still accounts for the lion’s share of digital advertising. According to eMarketer, a research firm, an estimated $17.6 billion was spent on search ads in America alone last year, with Google pocketing three-quarters of that sum. Facebook has been focused on digital display advertising and its success in winning business has helped its share price rise, phoenix-like, from the ashes of a catastrophic stockmarket flotation last year (see chart). If it can pinch search ads from Google and others too, its shareholders will be even more delighted.

[3] Hence Mr Zuckerberg’s third pillar. Still in its infancy, the new search engine serves up answers to queries by tapping into people’s social networks and those of their mates. So someone who is, say, thinking of visiting New York can search for “restaurants in New York visited by my friends” to see eateries his pals have raved about there. Lonely hearts can trawl for kindred spirits who happen to know their friends, and job-hunters can more easily track down people who know folk at companies they want to work for. All this should offer plenty of fodder for targeted ads.

[4] Some critics point out that the social network is very late to the search game. “It’s unbelievable that Facebook has taken so long to do something that should be table stakes online,” says Nate Elliott of Forrester Research. But Facebulls point out that Google, whose Google+ social network is still a shadow of Facebook’s, cannot match its rival’s prowess in “social” search. And they claim that Facebook’s move will help it counter the likes of Siri, a voice-activated personal assistant for mobile devices from Apple, which is hoping mobile search ads will boost a share price that dipped below $500 this week, having been more than $700 in September.

[5] The social network’s gambit could have another benefit too. Many speculate that Facebook’s growth may have stalled in some rich countries, such as Britain, where according to one estimate it is now used by over half of the population. So the firm needs to persuade existing customers to visit it more frequently. A search engine that is actually useful would certainly help here, assuming that any privacy worries it raises can be calmed.

[6] Mounting an effective challenge to Google will still be tough, however, because most web searches are for things such as the weather and traffic conditions, where friends’ opinions are irrelevant. (Recognising this, Facebook has turned to Microsoft, whose Bing search engine will answer such queries in the social network’s service.) Moreover, many Facebookers don’t “like” their doctors, dentists, builders and other things that would help make social search more valuable. Without such material, Facebook’s new pillar will be built on a shaky foundation.

From the print edition: Business

[Seok Ihm]

이거 읽으면서 좋은 표현들을 많이 봤네요.. 감사^^