Global Times - Global Challengers outperform competitors amid economic crisis

Global Challengers outperform competitors amid economic crisis

Source: Global Times
[03:54 September 11 2009]
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By Guo Lu in Dalian

A new study revealed Thursday at Summer Davos showed that the 100 Global Challengers are still striving for global leadership, despite the global economic downturn.

According to a new White Paper released by Boston Consulting Group (BCG) nearly half of the Challenger companies outperformed their industries in terms of relative total shareholder returns from June 2008 to June 2009.

Several Chinese private companies on the Challengers list, including Shenzhen-based Huawei Technologies, Guangdong-based Galanz Group and Chery Automobile Co, are mentioned for rebounding faster from the global downturn than most of their competitors. Their success was attributed to healthy growth in the domestic market and strategic responses to the crisis.

Huawei, for example, was praised for transitioning from a low-cost hardware provider to a service-oriented company and expanding into developed markets like the US and Switzerland. Galanz, a leading home appliance manufacturer, was noted for bringing in personnel from large international companies.

David Michael, a BCG senior partner and one of the authors of the paper, told the Global Times, "The private sector is a very important driver in every economy in the world. Within the private sector, small-and medium-sized businesses (SMEs) play an essential role."

"Many of the Challengers on the list began as small businesses, so financing for SMEs is very important," he added.

"China has reformed financial programs for small businesses to get more access to capital. In the long run these types of reforms will be fundamental to China's economic health."

Meanwhile, the report warned the incumbent multinational companies not to underestimate the challengers' performance or retreat to their own countries. The multinational companies may see opportunities in emerging markets like China and India.

"Multinational companies must take urgent action to anticipate this dynamic and respond to it. It will be their most pressing imperative in the post-crisis world," Michael said.