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The rapid rise of the emerging economies — not just the BRIC countries but also the Eastern European and South American countries — will by far be the most important topic for top management, CEOs and management consultants in 2011. These growing economies are fundamentally changing the nature of industries, the dynamics of competition and the strategies for sustained competitive advantage.

CEOs and corporate boardrooms will focus on understanding the nature of these changes and devising effective strategies to take full advantage of the shifting business landscape. They will also be taking a look at the rise of Asia, including China and India, to consider how their businesses will participate in this new paradigm.

Despite the multifaceted changes engulfing the global economy in current times, there seem to be three underlying themes that bring all these facets together. First is the shift in global economic power from the developed, and now saturated, Western economies to the emerging, and vastly untapped, economies of Asia, South America and Eastern Europe.

Second is the emergence of a new middle class in the emerging economies with sizes bigger than the entire population of the United States. This phenomenon is facilitating the integration of hundreds of millions of people into the middle class in the space of only one generation.

Third is the spread of pervasive new technologies that have consistently managed to break down national boundaries and trade barriers, bringing the world economy closer together by making it more interconnected than at any time in the history of the world and empowering customers like never before.

All these major and minor changes to the nature of doing business are both good news and bad news to companies. Companies are an outcome of complex combinations of multiple components, constituents and collaborators. As such, the success or failure of modern-day corporations cannot be easily attributed to any one single corporate act. Such combinations have become even more complex because of the ever-increasing scale and scope of business.

Therefore, CEOs and companies cannot just think about risk or diversification or growth. They are forced to think about all of these aspects of business together. The important question is: how do they change their definition of corporate scope — that is, where to compete, how broadly to compete, and to compete against whom?

But even before CEOs and corporate boardrooms can answer these questions, it is imperative to understand how these macro-changes are altering some specific business and brand-related aspects.

First, competition is becoming increasingly multipoint and multinational. Second, strategic differentiation of brands by positioning them effectively is becoming increasingly difficult. Third, competitive advantage for global brands is becoming more transitory than enduring. Fourth, aided by developments in technology, innovation is influencing both the strategic scope and the marketing strategies of leading brands.

These changes are currently very pronounced in Asia. Consider countries such as Indonesia, Malaysia, Thailand, Singapore, South Korea and Taiwan. Although none of these countries’ domestic markets compare to China and India, they are surging forward with their local brands, competitive strategies and their quest to build global brands.

Although a lack of large domestic markets and the relatively smaller size of the local brands from these countries can be constraining, they can also act as advantages especially from a strategic agility perspective.

Given the changing nature of competition, one of the key strengths that global brands should develop is an ability to react to changes — both internal and external, macro and micro, local and global — at a rapid pace. The ability to rapidly react and adapt structures, strategies, and brand offerings is usually referred to as strategic agility. The biggest challenge this year will be to develop the strategic agility to respond to rapid external changes and to proactively innovate, collaborate and develop visionary leaders internally.


This article is the first of a two-part series. The next article will appear on Jan. 3


Martin Roll is a global business and brand strategist. His Web site is http://www.martinroll.com.