Growing numbers of companies based in emerging markets are moving beyond their borders to claim a share of global trade in everything from apparel to city buses. But this trend shouldn’t be mistaken for a continuation of the “made in China” era, when developing countries served mostly as sources of cheap labor and low-cost goods. Nowadays, emerging market companies are more likely to be big, ambitious brands of their own. Companies from Brazil, China, India, and Mexico compete with Western rivals in every conceivable way, going after the same customers, the same revenues, and the same sources of capital.
Global expansion has emerged as a strategic imperative for emerging market companies with stunning speed, and the evidence is in Global 500 lists, where the ranks of these companies have swelled. But emerging market companies are still in a relatively early stage of globalizing, and like anyone doing something for the first time, they need some advice to find their footing.
To get a clearer sense of the challenges faced by emerging market companies as they globalize, Strategy& studied seven companies in Brazil — a country that has emerged as one of the great economic success stories of the last decade. In deconstructing the journeys of Brazil’s rising multinational companies, we arrived at a framework
for companies that are new to globalization. The framework breaks down the major areas that multinationals must think about, including their strategic intent and operating models, and offers a comprehensive view that will be useful not just to Brazilian companies but to emerging market companies everywhere.