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what strategies succeed in a downturn
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what opportunities and threats are on
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the horizon and what is the outlook for
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Global markets we turn to experts from
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the Boston Consulting Group and the
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Wharton School For
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answers multinational companies need to
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adap their strategies because of the
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global downturn that means focusing on
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your costs and many ways that may mean
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more production in the lower cost
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countries at the same time multinational
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companies still need growth
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opportunities and with domestic Market
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shrinking at 67 some of them 20% they
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lose those opportunities to be able to
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grow however demand in countries like
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China and India are still
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growing in the developed economies we
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see growth rates going from Plus 3% to
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negative numbers in the rapidly
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developing economies we may see growth
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rates going from 12% to 6% now there's a
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big difference between a shrinking
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economy and a developing
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economy these developing economies are
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also giving rise to an emerging group of
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global challenges that are winning
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customers away from more established
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companies we see increasingly uh a
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situation in many Industries even Global
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and high-tech Industries in which Indian
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companies or Chinese firms or Mexican or
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Brazilian or even some Middle Eastern
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companies right uh across manufacturing
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service and infrastructure sectors uh
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are making a dent in global competition
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and stealing market share away uh from
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European Japanese or American firms that
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the rapidly developing economies we'll
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see changes as they come out of this
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they'll see stronger players because
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they capitalized on their low costs in
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the marketplace and therefore they'll
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see a lot more leverage and a lot more
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moves towards the development of more
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multinational companies from the rapidly
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developing economies of places like
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China India Russia and Brazil as we come
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out of recession The Challengers will
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now have the opportunity to make asset
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Investments at much lower costs two
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years ago if they're going to buy some
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of their Western competitors or buy
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Western assets they would pay very high
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prices right now those assets are
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available at relatively low prices given
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the the change in the economy there's a
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real Advantage for the challengers
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in this current recession the challenges
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are in control of many of the assets
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that are the lowest cost assets on the
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planet all recessions end eventually but
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different countries will likely recover
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at different
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times I would uh you know definitely bet
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my my money that that China and the us
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are going to be the first to come out
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European economies probably last that
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the United States will be uh among the
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first to come out because it has by far
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the most flexible labor market in the
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world and I think uh the key to the
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recovery will be how fast economies
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around the world reallocate workers from
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declining Industries those that don't
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have uh that much of a feature at least
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in the next 5 to 10 years uh to other
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activities uh that will probably grow
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either because the economy recoverers in
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general or because of the stimulus uh
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fiscal stimul stimulus that governments
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are are
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implementing but even in the midst of a
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downturn there are opportunities for
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companies to seize have bailout programs
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uh all over the world uh now uh United
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States China several of the European
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countries not all of them but several of
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them and uh this will be a winfall for
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companies that manage to position
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themselves and to win contracts for
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infrastructure development for uh
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introducing new information Technologies
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in hospitals for offering uh you know
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more efficient ways of delivering
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education all of the things that are uh
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you know dear to our governments around
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the world and uh you know they're
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spending money on right now additional
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funds right as part of these uh uh
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stimulus packages and for companies to
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think that uh well since everybody's
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suffering um you know all we need to do
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is just scale back and wait for better
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times uh we seeing evidence in
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manufacturing we're seeing evidence in
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distribution we're seeing evidence in
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infrastructure that there are new
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opportunities and that some companies
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are finding a way of uh uh you know um
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pursuing them profitably the biggest
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threat the multinational company
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companies face over the next few years
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is
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complacency that it's easy to sit back
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and wait for things to pass that they'll
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cut some costs they'll hunker down but
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that means you're going to miss
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tremendous opportunities and if you
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don't capture those opportunities your
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competitors will so it's critical that
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companies understand the opportunities
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that are in front of them whether it's
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new markets in the rapidly developing
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economies whether it's the taking the
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time to develop new products that better
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meet consumer needs to prepare to win
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the upswing
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