Business Landscape Shifting to Emerging Markets

Management Consulting Company McKinsey, has recently published Urban world: The shifting global business landscape.  This latest publication states that research conducted at Mckinsey shows that 45% of the Fortune 500 companies with be in emerging economies by the year 2025.  Further into the article 3 main points are made to help effectively manage such a change.

  1. Optimize sales networks
  2. Understand how customers and competitors are evolving
  3. Reconsider the headquarters configuration and the location of other core activities

Its true that there are many fast growing cities in emerging markets and over 6,000 companies of $1 billion plus revenues are in such economies however an additional 7,000 companies with such revenues would be needed in these markets to reach the 45% mark of Fortune 500 companies.  Certainly Optimizing your sales network is always a good idea and excellent operations always takes into account demand forecasts.  Management consultants and operations consultants should always advise clients to monitor customer trends and competitors.

Moving your headquarters however can be a very complicated process and many businesses might not have the correct implementation skills to take on such a move or the leadership. Starting a division and correctly allocating certain control to such a division could help smooth such a transition without taking on too much risk.  CEO’s need to recognize the potential for such a business landscape shift but need to carefully evaluate if taking action is best for the company.