Les nouveaux héros des économies à croissance rapide
Description
Certaines entreprises œuvrant sur les marchés émergents ont réussi à stimuler la croissance malgré le bouleversement économique. Qui sont ces nouveaux héros et quelles stratégies ont-ils adoptées?
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| Publié par | Ernst-And-Young |
| Publié le | 01 septembre 2010 |
| Nombre de lectures | 107 |
| Langue | English |
| Poids de l'ouvrage | 2 Mo |
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Emerging heroes
Observations from rapid-growth economies
“emerging hero” noun. plural: emerging heroes • one becoming admired for great or noble deeds one who is increasingly regarded as a model for others •
Contents
Executive summary: Driving growth in times of turmoil
Observations 1. Focusing strategy on growth 2. Aligning the Capital Agenda to growth 3. Building from the core and matching tactics to markets 4. Prioritizing go-to-market push 5. Optimizing operations and focusing on customers
About this report
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Driving growth in times of turmoil
Executive summary The markets have changed, again. After two years of focus on cost-cutting and retrenchment, many companies in developed economies are today, once again, looking for growth. But in many emerging markets, the past two years have been a period of very different trends, with countless companies achieving dramatic top and bottom-line growth. -Clearly, some of these growth successes stem from local economics — it was easier to grow when domestic economies were growing their GDP rapidly (China c. 10%, India c. 8%). But macroeconomic development does not appear to be the whole story for a handful of leading businesses. Some of these companies have grown so rapidly that they are now world leaders (see page 4). So what were the strategies and tactics used to drive such outstanding growth? During August 2010, we commissioned the Economist Intelligence Unit to survey 547 large companies based in 47 emerging markets (see page 18). We asked executives which strategies and tactics they have adopted to drive differential growth. We also held in-depth conversations with selected companies whose growth had outperformed their competitors’. Our hypothesis was that the fastest-growing companies from this group — the “emerging heroes” — had developed innovative strategies and successfully executed these by employing unique tactics to drive growth. But we were surprised to learn that this was not always the case. Far from the direct international expansion we expected to see, it is clear that heroes often prioritized efficiency and market share at home first, before developing new products or markets elsewhere. On the following pages we summarize our five key observations on how emerging heroes have created growth. We look closely at the strategies and tactics that this group has used to outstrip their markets and drive differential growth and we compare their actions with competitors who have had low or no growth. While hero companies are operating in highly beneficial macroeconomic conditions, we believe many of their strategies and tactics can be adopted by any growth-focused corporation, regardless of where it is based.
Emerging heroes Observations from rapid-growth economies
How emerging heroes created growth Heroes have succeeded in driving growth, despite recent economic turmoil. This is what they have been doing to build profitable growth: 1. Focusing strategy on growth • Prioritizing growth • Balancing aggressive and incremental growth tactics • Communicating strategy clearly • Setting strategic direction at the center 2. Aligning the Capital Agenda to growth • Concentrating on the Capital Agenda • Using existing reserves to fund growth • Obtaining asset-specific financing • Freeing cash from non-core assets 3. Building from the core and matching tactics to markets • Playing to existing strengths • Maximizing home markets first • Using existing products to enter new markets • Innovating with existing products • Keeping internal costs under control • Marketing new products heavily 4. Prioritizing go-to-market push • Taking an innovative approach to the current market • Increasing the focus on marketing • Evolving distribution channels • Driving international sales • Consolidating via local acquisitions 5. Optimizing operations and focusing on customers • Using internal efficiency to drive growth • Understanding customers’ behavior • Building partnerships, not just relationships • Gaining advantage through brand and quality
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Who are the emerging heroes?
Of the companies we surveyed, 34% grew both revenue and profit Table 2: Top 25 listed companies in emerging markets by by over 20% over a three-year period — such companies are our market capitalization emerging heroes. These are impressive results when you compare them to the average 2% revenue growth and 20% profit drop of Market US-based S&P 100 companies and the average 8% revenue fall and NameCountrySectorv(aUlue$ b) 25% profit drop of FTSE Euro-100 Europe-based companies over S the same period. PetroChina China Oil and gas 334 ICBC China Banking and capital markets 242 Some of those demonstrating truly impressive growth have risen to Petrobras-Pet il Oil and as 19 the top of global market capitalization tables. Five years ago, there róleo Brasil Braz g 0 were 35 businesses from emerging markets in the Forbes 500 China Construction Bank China Banking and capital markets 184 companies. Today, there are 64 — an 83% increase. And when you Bank of China China Banking and capital markets 147 consider that many of the larger companies in scores of these Vale Brazil Mining and metals 145 markets, such as China, are not publicly listed, there has clearly Gazprom Russia Oil and gas 133 been a shift in value over a short period of time. This has been Sinopec-China Petroleum China Oil and gas 130 driven by both historic and forecast growth. Table 2 (right) shows China Life Insurance China Insurance 119 the largest listed emerging market companies from the Forbes 500. China Shenhua Energy China Mining and metals 85 But what is the source of this growth? How have these and other Rosneft Russia Oil and gas 83 businesses delivered differential growth beyond the local market América Móvil Mexico Telecommunications 72 conditions that their lower-growth competitors have also enjoyed? Reliance Industries India Oil and gas 69 Have they simply relied on low costs and growing home demand? Sberbank Russia Banking and capital markets 58 (As table below shows, annual real GDP growth in BRIC markets Bank of Communications China Banking and capital markets 57 has been far higher than the average of 2% in developed Banco Bradesco Brazil Banking and capital markets 55 economies.) Or have they found other methods of growing at Ecopetrol Colombia Oil and gas 54 faster rates? Ping An Insurance Group China Insurance 53 Following are five high-level observations that have been derived Oil & Natural Gas India Oil and gas 52 from our study on how differential growth has been achieved. China Merchants Bank China Banking and capital markets 46 Companies that beat the market to grow even faster than their Lukoil Russia Oil and gas 45 domestic competitors are our emerging heroes. The observations Banco do Brasil Brazil Banking and capital markets 43 below summarize their strategies and tactics. NMDC India Mining and metals 37 Table 1: 2010 forecast real GDP growth China Telecom China Telecommunications 37 China Citic Bank China Banking and capital markets 37 Country GDP growth Source : Forbes 2000 (March 2010) China 10.2% Brazil 6.8% India 8.2% Russia 4.2% Source: Global Insight
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Emerging heroes Observations from rapid-growth economies
Case study Home Inns — China Founded in 2002, Home Inns is already the market leader among budget hotel chains in China. The company is often credited with being the first to offer the business traveller in China a choice of good quality hotels at competitive prices. Home Inns has grown rapidly since inception. The Home Inns brand today includes 638 hotels, out of which 390 are operated directly by the company and the rest by franchisees. Its hotels can be found in 121 cities across China. The company’s revenue last year was RMB699 million (US$102.4 million), up 29.4% on 2008. “We’ve come a long way in the past three years to grow from 200 hotels to over 600,” says Yan Huiping, Chief Financial Officer of Home Inns. “We aim to continue our 25% top line growth.” The competition is fierce: by the end of 2009, there were 3,800 budget hotels in China. “However, if you look at the picture as a whole, the budget hotel market in China is still fragmented,” says Yan. With nearly 12,000 hotels in the one- to three-star categories, there is plenty of room for consolidation in the industry — a factor that underpins Home Inns’ growth strategy. Adapting to local conditions is also critical for Home Inns. “We need to take into consideration the peculiarities in China,” says Yan. “We also need to take a forward-looking view; not just pay attention to what China is now, but what China will be in 5 to 10 years. We have to ask ourselves whether we have forward-looking capabilities, whether we can seize growth opportunities, whether we have the capabilities to contain risks.”
Source : Interview conducted for Ernst & Young by the Economist Intelligence Unit
The shortage of skilled workers and maintaining service quality in its hotels are two major challenges for Home Inns. So while it relies on its franchisees to provide capital and secure prime locations for its hotels, the company itself concentrates on providing management support. Home Inns sends out skilled managers who then help train the local workforce. “We can only grow as quickly as we train our managers,” says Yan. “For me as a CFO, I will make sure I spend at least 30% of my time on training and coaching.” Home Inns has ambitious growth targets. It plans to expand in the interior regions and smaller cities of China and build its franchisee network. It is aiming to have a presence in at least 180 additional cities within the next three years. “We believe 75% of our growth will come from second- and third-tier cities. We need to get the early mover advantage,” says Yan. The company is also planning to diversify by creating a more upmarket brand that will serve the high-end business travel market. But Home Inns does not intend to grow at any cost. “As a leader in our field, we need to focus on the quality of growth rather than sheer speed,” says Yan. “For example, in the selection of properties, we maintain discipline. In our investment review, we have strict investment return cycles — often four to five years. We aim for profitable growth.”
Emerging heroes Observations from rapid-growth economies
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1. Focusing strategy on growth
Heroes prioritize, balance tactics, clearly communicate strategy and lead from the center.
Revenue growth can’t be taken for granted, as many So where does growth come from and how do heroes grow companies in mature markets have discovered. Our revenue while not forsaking profitability, in order to outperform study shows that heroes strategize about growth and others in the same rising markets? plan for it, without losing sight of the need to grow It begins with strategic intent. Ninety-five percent of high-growth companies have prioritized growth over other important goals, pbruosifint easss ewse. ll. It has been the primary focus of their such as business optimization and cost-cutting. This singular focus is clear. Lower-growth companies, while still looking for growth, have been much more likely to concentrate on business optimization and cost-cutting. Strategic focus is therefore a precondition for growth, but not the whole story. Fifty-three percent of hero companies have prioritized aggressive growth, utilizing techniques such as launching new products, entering new markets and making acquisitions. A further 41% have focused on incremental growth, using tools such as product refinement or marketing investment. Slower-growing businesses Fig. 1: What has been the emphasis of your company’s strategy over the past three years? 53 41 38 38 24
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5 Aggressive growth, Incremental growth, Optimizing e.g., new markets, e.g., product your business, new products, refinements, marketing e.g., cutting costs, acquisitions enhancements outsourcing Above 20% revenue/profit growth Below 20% revenue/profit growth Shown: percentage of all respondents Base: ≤20% revenue/profit increase (234), ≥20% revenue/profit increase (187) Emerging heroes Observations from rapid-growth economies
The approach to setting strategy also differentiates higher-growth “We sought to understand the focus of emerging companies from the rest. Sixty-five per cent of heroes cited heroes over the past three years. Our hypothesis was centralized strategic decision-making as their chosen route. This that growth is not guaranteed, rather focusing on it contrasts with 54% of lower-growth businesses. While setting “ high-level strategy at the center to ensure focus may be critical to above other priorities is key to success. success, using flexible and customized tactics at the local level is also im ortant. have been more conservative, with 38% identifying either growth p route, and 24% focused on optimization. We have to conclude that Again there was an interesting variance in responses, depending the passion for growth is reflected in results. on where the company was based. Indian companies seem to be o some Chinese We see significant differences in major markets covered by the fcaor mmpoarnei es.pen to local market variations than, say, survey. Hero companies in Brazil and India are relatively more likely to be pursuing an aggressive growth strategy. Companies in China The conclusion here is that heroes have delivered strong are more evenly balanced between aggressive and incremental performance by making growth their strategic focus. They have growth, and companies in Russia have a higher incidence of focus used central leadership to articulate and then drive strategy. They on optimizing operations. have then remained flexible, matching tactics to changing as In addition to prioritizing growth, clearly communicating the hcierlcpuemd sttoa dnrcievse. dTihffise rceonmtiabli nmatairokne to-fb cehatoiincge sg raorowutnh.d strategy h strategy to achieve this growth has been essential. In fact, 85% of high-growth companies said that dissemination of strategy was the most critical internal factor in achieving growth targets. Compared Fig. 2: Which approach to decision-making have you adopted to to this, only 66% of slower-growth companies believed such clarity achieve growth? was important to success. evenue/profit growth Above 20% r 65 9 26 “Heroes set strategy, but remain flexible. Ninety-six Below 20% revenue/profit growth 33 21 47 percent of high-growth businesses surveyed said that they flexed according to changing circumstances. An emphasis on centralized decision-making An emphasis on decentralized decision-making Only 1% said that they picked a course and stuck to it An equal mix of the two no matter what. Shown: percentage of all respondents. Figures have been rounded up “ Base: ≤20% revenue/profit increase (234), ≥20% revenue/profit increase (187)
Alesat Combustiveis — Brazil Alesat Combustiveis is Brazil’s fourth-largest petrol station portfolio, we also made two acquisitions in 2008 which operator and an Ernst & Young Entrepreneur Of The Year resulted in significant growth in market share through winner. Built from just one family-owned outlet, the company increased revenue as well as improved EBITDA. has now grown to more than 1,700 stations. Additionally, we established several joint ventures and Marcelo Alecrim, Founder and President said: partnerships with different companies to enable entry into new markets where we didn’t previously operate.” “The group had a clear strategy over the past three years; this was focused on aggressive growth and clearly communicated to all our stakeholders. In addition to incrementally improving our existing branded gas stations network, which is the main business in our
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2. Aligning the Capital Agenda to growth
Heroes focus on their Capital Agendas. Existing reserves fund growth, as do asset-specific financing and disposals.
Capital is scarce. Heroes may tap the financial markets The recent debate around capital, in developed more than in to minimize cost of capital, according to our survey. emerging economies, has focused on the imbalance between But they primarily ensure cash flow and cash reserves supply and demand. With investors and lenders seemingly less are maximized to fund growth. Put simply, failing to owtilhlienr go tpot ipornosv.i dWeh feurne dcsa, sthh owsaes rienq fuaicrit nagv caialsahb lhe,a tvhe ebree ehna ss ebeekeinn g prioritize the Capital Agenda in every investment significant competition, perhaps even a battle for capital. And in decision is a quick way of destroying value. Given emerging markets, with increasing competition for growth, there ongoing difficulties around completing equity has been similar demand for scarce funds. transactions, e.g., IPOs, maximizing existing reserves Fig.3: What sources of finance do you use to fund growth? is clearly critical. Retained earnings 91 (i.e., annual profits) 72 Cash on balance sheet 44 (cash reserves) 54 Asset finance 33 35 Short-term bank loans 17 39 Raising public equity 2233 Joint ventures 16 20 Disposals of non-core assets 1427 Raising public debt, e.g., bonds 1119 Above 20% revenue/profit growth Below 20% revenue/profit growth Shown: percentage of all respondents Base: ≤20% revenue/profit increase (234), ≥20% revenue/profit increase (187)
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Emerging heroes Observations from rapid-growth economies
potential growth opportunity with the capital required to acquire “Our goal was to clarify the balance of capital sources and sustain it. This method is one that many should more actively used by heroes. Our hypothesis was that self-consider. generated cash would be utilized before external Also notable has been the use of asset disposals to fund growth. . sources were tapped “ While slower-growing companies have rarely taken this option (14%), over a quarter of heroes (27%) have funded growth But how did heroes win this competition? We found that focusing through removing non-core assets from the portfolio. Clearly, a on their Capital Agendas was key. Related Ernst & Young research focus on primary business has boosted growth. has suggested four areas of focus: There was, however, some regional variance in the tactics used to • Preserving capital — reshaping the operational and capital base fund growth. For heroes in all BRIC economies, using retained • Optimizing capital — driving cash and working capital earnings has been the most favored option. In Russia, however short-term bank loans have been used in preference to cash • Raising capital — assessing requirements and determining funding reserves, and raising equity was similarly popular in China. • Investing capital — strengthening investment appraisal Overall, the availability of capital h s clearly been critical to a Heroes, while often based in economies that have suffered less enabling growth. Heroes have behaved prudently, removing from “the great recession,” have had to think broadly about their non-core assets and primarily using their own funds to invest — and Capital Agendas. In fact, 91% of heroes surveyed have funded ncin growth through retained earnings, that is, they have made ongoing tdheeciys ihvaev ae caticotinv ealryo iunnvde sctaepdi.t aCl ohmasb ibneeedn wrietqh uairsesde tt ofi ndarive g, investments from cash flow. This falls to 72% among those with adin lower growth rates. Clearly, living within one’s means has proven differential, market-le g growth. successful, but too much caution could stunt growth. Fig. 4: The Capital Agenda “Having a strong profile in capital markets is key to keeping funding options open. Seventy-six percent of • lSitqrueisdsi tay nisd sduiests raenssd — e.g., turnaround plans heroes surveyed said building a strong financial • aCnuasltyosimser and supplier reputation has been on their agenda.“ • mPrineismerizviinngg ctaoxs tasssets and • Refinancing or restructuring debt, equity and other obligations • Dealing with stakeholder Heroes do not simply horde cash for a rainy day. Forty-four percent relationships and pressure • Dispute resolution have funded organic growth through reserves. A higher proportion (54%) of lower-growth companies have done the same. This was The Capital Agenda clearly a lower-risk option, as the cash was at hand. It has ensured that swift action could be taken once an opportunity was identified. •• APlcaqnuniisnitgi oannsd asntrdu acltliuarnincge s Today, quite noticeably, many large corporations in developed tsrtaankseahcotlidoenrs rteot uorpntimize • Focused due diligence markets have built large cash piles, but some are yet to deploy these. tdor ivmeit ivgaaltuee risk and Asset valuations • Around a third of those surveyed similarly matched capital to • Cstorsut-c taunrde stax-efficient investment via other funding mechanisms. Thirty-three per cent of heroes cited asset finance as critical to growth – again linking each
• Optimizing asset portfolio • Delivery of synergies and effective integration • Improving working capital and releasing cash • Optimizing capital structure • Optimizing tax and corporate structure • Fundraising (equity and debt) - IPO readiness, rights issues, PE, private placement and capital markets Optimizing funding • structures • Asset divestment • Infrastructure projects • Cost- and tax-efficient structures
Forest Papír Kf — Hungary Forest Papir Kf is a Hungarian paper manufacturer and an “We have maintained a conservative financial strategy to Ernst & Young Entrepreneur Of The Year winner. By gradually preserve our independence and minimize the need to provide expanding its product range, the company has created a brand a return to external funders.” that is competitive in Europe. “We have kept leverage very low and have not changed the Ferenc Bodrogai, CEO, said: capital structure significantly. The emphasis of our strategy has not altered since the foundation of the company, but we “Thhaev em gaeinn esroautrecde aonf dfi rneatnaicninegd fwoirt hoiunr t ghreo bwutshi nise tshs.e” profit we are constantly making improvements to the business model.”
Emerging heroes Observations from rapid-growth economies
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3. Building from the core and matching tactics to markets
Heroes grow at home before they look elsewhere. They tailor tactics, invest in marketing and innovation and manage cost at the core.
Heroes primarily drive growth in their existing markets Higher-growth companies have made greater use of existing using their existing products. This is far from products in existing markets to drive growth. Sixty-six percent of surprising, as playing to existing strengths is a heroes have focused on this technique, versus 49% of slower-recognized contributor to success. egcroonwothm ioersg, aenimzeartigoinnsg. hBeernoeefist ihnagv ien l emvaernay gceads tehs efirro emx ifsatisnt-gg rporowdinugc t and market mix more frequently than slower-growing businesses. And more than half of hero companies have found that using their existing products to enter new markets has driven growth. Only 29% of lower-growth companies have made the same choice. Similar percentages of higher- and lower-growth companies have developed new products for existing markets. This result suggests that investment in new product development has not driven significant differential growth. Fig.7: What tactics have you found the most effective in driving growth? 66 53 49 4139 29 16 11 Driving existing Entering new Launching new Entering new products into markets with products into markets with existing markets existing products existing markets new products Above 20% revenue/profit growth Below 20% revenue/profit growth Shown: percentage of all respondents Base: ≤20% revenue/profit increase (234), ≥20% revenue/profit increase (187)
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Emerging heroes Observations from rapid-growth economies
We sought to understand the tactics employed by tEov edrriyv em garrokewtt ihs vdaifrfye rbeyn tm. aHrekreoteplsa fcoeu. nWdi tthh aetx itshtien tga cmtiacrs kdeetsp,l oyed “ heroes for the various products and the geographical product improvement and cost are critical. In new markets, markets they might wish to sell to. Our hypothesis was marketing, price position and local relevance are key. that there would be some variance between tactics e clear io of heroes toward more conservative used for new and existing products and markets.“ pGriovednu ctth and marpkret risttyrategies, insight into the tactics used in these scenarios is enlightening. Not surprisingly, few companies, neither high- nor low-growth, The most successful option has been driving growth through have found that the riskiest and least-known combination of new re 81% products and new markets has driven growth.uesxiesdt ipnrgo pdruocdt uicmtsp rion veeximsetinntg asm tahrke eptrsi. mHaery ,d river oof f hgerroowets hh, ave If we look at the picture by country, we see companies have compared with 62% among slower-growing businesses. And 77% of achieved growth initially through home markets, then regionally, then globally. chain dr r th: 35% of Fig. 8: Which geographic markets have contributed the most to “Moving up the value ove g ow your company’s growth over the last 3 years? emeemriguinmg chuesrtoes eirdse, nctiofimepd atrheedi r wtiatrhg 2et5 s%e ogf mloewntesr -as pr om Markets contributing to growth Respondents from: growth companies.“ Brazil Russia India China Middle East (including North Africa) 7 2 19 7 heroes have cut internal costs to drive margin growth versus 60% Sub-Saharan Africa 4 0 3 2 of slower-growth companies. Clearly, refinements on product and Asia-Pacific (excluding India & China) 6 8 13 42 cost base have driven growth. US or Canada 11 6 29 24 The second-most successful strategy has been driving existing Latin/South America (excluding Brazil) 44 0 8 6 products into new markets. Here, 72% of heroes (versus 38% of China 11 5 10 87 slower-growing companies) have found raising profile to be the Russia 2 96 2 2 best way of gaining share in new markets. And 70% of heroes have Western Europe 7 6 15 7 controlled costs to win share, compared with 51% of weaker Eastern Europe 2 16 5 0 performers. Marketing and, again, cost control seem to have driven growth for existing products in new markets. India 4 0 74 4 Brazil 78 2 7 2 Shown: percentage of respondents from Brazil (54), Russia (67), India (62), China (55) Incontrol Tech Sdn Bhd — Malaysia Incontrol Tech Sdn Bhd is a Malaysian waste management “In new markets in GCC, we heavily marketed to existing company and an Ernst & Young Entrepreneur Of The Year customers while seeking to build partnerships with new clients ” . winner. “In both cases, we chose to play to our strengths to build a Harvinder Singh, Founder and Managing Director, said: profitable business effectively.” “We prioritized our home market, where we consolidated our “The decision to have diverse products and markets was taken position as the technology, quality and price leader. The result so that we can balance out the effect of business cycles and was capture of additional market share ” therefore keep our business stable.” . Emerging heroes Observations from rapid-growth economies 11
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