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Page 1: Business Perspectives on Emerging Markets 2012-2017 · Business Perspectives on Emerging Markets 2012-2017 Why this study is important Natan Rodeguero Vice-President, Latin America

www.globalintelligence.com All Rights Reserved ©2012

Business Perspectives on Emerging Markets 2012-2017

Global survey (Brazilian results), June 2012

Page 2: Business Perspectives on Emerging Markets 2012-2017 · Business Perspectives on Emerging Markets 2012-2017 Why this study is important Natan Rodeguero Vice-President, Latin America

Latin America has not been spared the effects of the current global economic crisis. Even with strong domestic markets, a decrease in external demand could spell trouble for Brazilian companies. Moreover, 66% of the global companies in GIA’s Business Perspectives on Emerging Markets 2012-2017 Report say that Brazil is one of their top target markets to 2017, promising more competition from foreign players on their own home turf.

So what are Brazilian companies doing to target opportunities in other Emerging Markets? The Brazilian companies surveyed by GIA expect an average of 38% of their global revenues to come from Emerging Markets by 2017, but over 80% admit that they could have done some things better in their Emerging Markets strategies.

With this study, we share the strategic ambitions, concerns and challenges facing Brazilian companies in other fast moving markets. I wish you an insightful read. We welcome you to share your thoughts with me or any of my colleagues around the world. Our mission is to help companies understand, compete and grow in international markets.

For the global findings or other country reports, please visit http://bit.ly/GIA2012 www.globalintelligence.com | [email protected]

Business Perspectives on Emerging Markets 2012-2017 Why this study is important

Natan Rodeguero Vice-President, Latin America Global Intelligence Alliance

www.globalintelligence.com 2

Page 3: Business Perspectives on Emerging Markets 2012-2017 · Business Perspectives on Emerging Markets 2012-2017 Why this study is important Natan Rodeguero Vice-President, Latin America

Executive Summary: Brazilian companies prefer to invest in Emerging Markets in their own region But they lag behind their global peers in using Market Intelligence and decision making is often delayed as a result

3 www.globalintelligence.com

Emerging Markets focus and expectations

•  Brazil, Russia, India and China are the top four most important Emerging Markets for Brazilian companies to 2017, with their country as top priority.

•  Argentina and Mexico (38%) are the next upcoming second-tier Emerging Markets after BRIC, followed by Chile and South Arica (28%).

•  Brazilian companies chose more African and Middle Eastern countries amongst their top 25 ranked Emerging Markets, compared to other global companies.

•  Asian, European and Latin American companies are all bullish about expected revenues from Emerging Markets (38%, 37% and 36% of total revenues by 2017, respectively), followed by US companies (34%).

Motivations and concerns

•  Brazilian companies’ Emerging Markets strategies are primarily driven by the desire to gain a foothold in future large markets and gain global market share.

•  34% of Brazilian companies’ customers are in Emerging Markets. 21% want to diversify risks in Emerging Markets and 21% think there is a lack of growth/profit in established markets.

•  86% would have done things differently with regards to their Emerging Markets strategy. Almost a quarter of them would have made greater efforts to conduct intelligence/due diligence. A fifth would have adapted local markets/prices better (20%).

•  Brazilian companies appreciate the value of market intelligence, with 86% saying that accurate market sizing and growth estimates are critical to their Emerging Markets Strategy. However, only 34% use market intelligence to support their decisions on Emerging Markets, versus a global average of 55%.

Page 4: Business Perspectives on Emerging Markets 2012-2017 · Business Perspectives on Emerging Markets 2012-2017 Why this study is important Natan Rodeguero Vice-President, Latin America

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How can Brazilian companies succeed in Emerging Markets in 2012-2017?

Page 5: Business Perspectives on Emerging Markets 2012-2017 · Business Perspectives on Emerging Markets 2012-2017 Why this study is important Natan Rodeguero Vice-President, Latin America

•  In April-May 2012, GIA conducted an online survey amongst business managers at 431 large and mid-sized companies around the world, 29 of which were companies headquartered in Brazil.

•  We asked them questions such as: •  How do you define Emerging Markets in your company? •  Which are the top Emerging Markets for your industry over the next five years? •  What key factors will determine whether foreign companies succeed in Emerging Markets? •  What are the biggest threats to succeeding in Emerging Markets? •  What are your company’s main reasons for investing in Emerging Markets? •  What share of your company’s global revenue do you expect to come from Emerging Markets? •  Which one aspect of your Emerging Markets strategy would you go back and change if you could?

•  The Brazilian respondents’ primary job functions included sales and marketing (24%), senior management (21%), market/competitive intelligence (17%), strategic planning/business development / research and development / product management (10%), including others.

•  Approximately 30% of the Brazilian companies in the survey earned more than $1.3 billion (1 billion Euro) in annual revenue and about 50% have more than 1,000 employees each.

•  See Appendix for more details about the survey sample.

29 Brazilian companies told us what drives their strategy How do companies perceive Emerging Markets; what are their plans; what do they want to achieve?

5 www.globalintelligence.com

Page 6: Business Perspectives on Emerging Markets 2012-2017 · Business Perspectives on Emerging Markets 2012-2017 Why this study is important Natan Rodeguero Vice-President, Latin America

•  Manufacturing & Industrial

•  Telecommunication, Technology & Media

•  Professional & Business Services

•  Financial Services

•  Consumer & Retail

•  Pharmaceuticals & Healthcare

•  Energy, Resources & Environment

•  Automotive

•  Chemicals

•  Logistics & Transportation

10 industries are represented in this report The industries are represented by the following symbols

6 www.globalintelligence.com

Page 7: Business Perspectives on Emerging Markets 2012-2017 · Business Perspectives on Emerging Markets 2012-2017 Why this study is important Natan Rodeguero Vice-President, Latin America

•  GIA took the opportunity to donate 13 BRL / $6.50 for every completed survey.

•  The donation came close to 5,670 BRL / $2,800 , distributed across the following local charities:

This study also helped people living in Emerging Markets Donations from this study went to four charities assisting poor communities in Emerging Markets

7 www.globalintelligence.com

•  Cambodia: Tabitha (NGO that runs self-help programs on personal and financial development for the poorest people)

•  Brazil: VidaBela (NGO that awards university scholarships to talented candidates from highly disadvantaged socio-economic backgrounds)

•  Russia: Gift of Life/Podari Zhizn (charity that funds vital medicine for leukemia treatment and searches for potential bone marrow donors for children)

•  South Africa: CANSA (NGO that provides holistic cancer care and support to those affected by the disease)

Page 8: Business Perspectives on Emerging Markets 2012-2017 · Business Perspectives on Emerging Markets 2012-2017 Why this study is important Natan Rodeguero Vice-President, Latin America

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Emerging Markets focus for Brazilian companies to 2017

Page 9: Business Perspectives on Emerging Markets 2012-2017 · Business Perspectives on Emerging Markets 2012-2017 Why this study is important Natan Rodeguero Vice-President, Latin America

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Brazilian companies define Emerging Markets based on BRIICS or BRIC

9

Stage of economic development is another popular definition of emerging markets

How Brazilian Companies Define Emerging Markets

Source: Global Intelligence Alliance, Business Perspectives on Emerging Markets 2012-2017. Respondents were allowed to select more than one.

Question: How do you define Emerging Markets in your company? N=29 (Brazilian companies).

Emerging Markets focus to 2017 (Brazilian companies)

24%

20%

18%

11%

9%

6%

4%

4%

2%

2%

BRIICS (BRIC, Indonesia, S. Africa)

Stage of economic development

BRIC (Brazil, Russia, India, China)

Market growth rate

By geography (eg. in region X)

Market not in US, Western Europe, Japan

Penetration level of product/service

Proprietary listing eg. FTSE, S&P

Penetration level by my company

Penetration level by multinationals

Page 10: Business Perspectives on Emerging Markets 2012-2017 · Business Perspectives on Emerging Markets 2012-2017 Why this study is important Natan Rodeguero Vice-President, Latin America

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Global companies pick Emerging Markets in Asia, Latin America, Russia, South Africa & Turkey as top targets

10

Top 10 Emerging Markets (2012-2017) by % all companies

Source: Global Intelligence Alliance, Business Perspectives on Emerging Markets 2012-2017 Survey.

Question: Which are the top 5 Emerging Markets for your industry over the next 5 years? N=427 (All companies).

Emerging Markets focus to 2017 (All companies)

Page 11: Business Perspectives on Emerging Markets 2012-2017 · Business Perspectives on Emerging Markets 2012-2017 Why this study is important Natan Rodeguero Vice-President, Latin America

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Brazilian companies place less focus on South East Asian markets than global peers

11

Source: Global Intelligence Alliance, Business Perspectives on Emerging Markets 2012-2017 Survey.

Top 10 Emerging Markets (2012-2017) by % Brazilian companies

Question: Which are the top 5 Emerging Markets for your industry over the next 5 years? N=29 (Brazilian companies).

Emerging Markets focus to 2017 (Brazilian companies)

Page 12: Business Perspectives on Emerging Markets 2012-2017 · Business Perspectives on Emerging Markets 2012-2017 Why this study is important Natan Rodeguero Vice-President, Latin America

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Brazilian companies favor BRIC as top Emerging Markets

12

Brazilian companies consider Brazil as their number one Emerging Market

Top Four Emerging Markets (2012-2017)

Source: Global Intelligence Alliance, Business Perspectives on Emerging Markets 2012-2017. Respondents were allowed to select more than one. * Figures based on 2012, 2013 and 2017 average from IMF World Economy Outlook: Growth Resuming, Dangers Remain

•  Brazil, Russia, India and China are the top four most important Emerging Markets for Brazilian companies to 2017.

•  The four BRIC countries are not expected to be equally important, with Russia being least favored (45%). Meanwhile, Brazilian companies consider their country as their number one Emerging Market.

•  However, inconsistently, according to the IMF, average growth rates for 2012-2017* are 7.4% for India, 3.7% for Brazil, 8.5% for China, and 3.9% for Russia.

•  Brazil seems to be finding favor for reasons other than its growth rates.

Question: Which are the top 5 Emerging Markets for your industry over the next 5 years? N=29 (Brazilian companies).

82.8%

62.1%

55.2%

44.8%

Brazil

India

China

Russia

All companies Brazilian companies

Brazil 66.3%

India 67.0%

China 66.0%

Russia 40.0%

Emerging Markets focus to 2017 (Brazilian companies)

Page 13: Business Perspectives on Emerging Markets 2012-2017 · Business Perspectives on Emerging Markets 2012-2017 Why this study is important Natan Rodeguero Vice-President, Latin America

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205.72 1,205.10 1,343.24 138.08

China’s economy outweighs the other BRIC countries but Brazil and Russia have highest GDP per capita

13

Different BRIC countries are attracting interest and investment for different reasons

Source: Global Intelligence Alliance; IMF; CIA

Population Persons (millions)

GDP USD (Billions)

GDP (PPP) per Capita Current international dollar

GDP growth rate 2012 (e)

Land Km2

Brazil India China Russia

11,600 3,700 8,400 16,700

2,518 1,843 6,989 1,791

3.0% 6.9% 8.2%

4.0%

8,514,877 3,287,263 9,596,961 17,098,242

Emerging Markets focus to 2017 (All companies)

Page 14: Business Perspectives on Emerging Markets 2012-2017 · Business Perspectives on Emerging Markets 2012-2017 Why this study is important Natan Rodeguero Vice-President, Latin America

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303 286 1,312 375

China is the easiest to do business in and Brazil is becoming more competitive in the global context

14

Levels of development and the opportunities vary across the different BRIC countries

Source: Global Intelligence Alliance; MIIT China, TRAI India, Anatel Brazil, Deloitte

Brazil India China Russia

Mobile subscribers Q1, 2012

Teledensity (wireless) Q1, 2012

1.01 billion 919 million 250 million

No. of millionaire households 2011, thousands

Ease of doing business Index (World Bank) 2011, ranking

91 132 126

Global Competitiveness Index (WEO) 2010/11 to 2011/12, ranking

120

227 million

74% 76% 126% 160%

26 53

58

51

27 66

63

Emerging Markets focus to 2017 (All companies)

Page 15: Business Perspectives on Emerging Markets 2012-2017 · Business Perspectives on Emerging Markets 2012-2017 Why this study is important Natan Rodeguero Vice-President, Latin America

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26%

28%

21%

33%

29%

25%

24%

32%

17%

19%

15%

13%

28%

28%

40%

22%

US headquarters

European headquarters

Latin American headquarters

Asian headquarters

Brazil Russia India China

Latin American companies are less adventurous when it comes to looking outside their home region

15

European companies are prioritizing Asia and Latin America despite their proximity to Russia

Top Four Emerging Markets by Location of Headquarters (2012-2017)

Source: Global Intelligence Alliance, Business Perspectives on Emerging Markets 2012-2017 Survey. Respondents were allowed to select more than one.

Question: Which are the top 5 Emerging Markets for your industry over the next 5 years? (To 2017) N=395 (Total): N=95 (US), N=161(Europe), N=44 (Latin America), N=95 (Asia).

Emerging Markets focus to 2017 (All companies)

Page 16: Business Perspectives on Emerging Markets 2012-2017 · Business Perspectives on Emerging Markets 2012-2017 Why this study is important Natan Rodeguero Vice-President, Latin America

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Brazilian companies’ second tier Emerging Markets span the globe, led by Argentina and Mexico

16

Emerging Markets after BRIC (2012-2017)

Africa/Middle East Asia Europe Latin America

Source: Global Intelligence Alliance, Business Perspectives on Emerging Markets 2012-2017 Survey.

•  Most of the 25 non-BRIC Emerging Markets that Brazilian companies plan to target in 2012-2017 are in developing economies.

•  Argentina and Mexico (38%) are the next upcoming second-tier Emerging Markets after BRIC, followed by Chile and South Arica (28%).

•  Brazilian companies chose more African and Middle Eastern countries amongst their top 25 ranked Emerging Markets, compared to other global companies.

•  Moreover, they chose three of “The Four Asian Dragons”, Hong Kong, Singapore, South Korea and “The Four Asian Tigers” as their Emerging Markets. Question: Which are the top 5 Emerging Markets for your industry over

the next 5 years (to 2017)? N=29 (Brazilian companies).

Country % 5 Argentina/Mexico 37.9%

6 Chile 27.6%

6 South Africa 27.6%

8 Colombia 24.1%

9 Peru 20.7%

10 Turkey 10.3%

11 Indonesia 6.9%

12 Czech Republic / Hungary / Lithuania / Poland / Romania 3.4%

12 Hong Kong / Malaysia / Pakistan / Philippines / Singapore/ S Korea/ Thailand / Vietnam

3.4%

25 Morocco / Nigeria / Oman / Saudi Arabia 3.4%

Emerging Markets focus to 2017 (Brazilian companies)

Page 17: Business Perspectives on Emerging Markets 2012-2017 · Business Perspectives on Emerging Markets 2012-2017 Why this study is important Natan Rodeguero Vice-President, Latin America

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15% 18% 4%

26%

15% 17%

11%

11% 10%

11%

3%

22% 15% 10%

29%

6% 14% 17%

7%

6% 10% 4%

20%

2%

5% 7% 1%

10%

6% 3% 20% 3%

6% 6%

4%

6%

4% 7%

1%

8%

US HQ European HQ Latin American HQ Asian HQ

Malaysia

South Korea

Chile

Thailand

Argentina

Turkey

Mexico

Vietnam

South Africa

Indonesia

After Indonesia and South Africa, Turkey and Mexico interest US and European companies most

17

Latin American companies focus more on their own home region; Asian companies favor Vietnam

Source: Global Intelligence Alliance, Business Perspectives on Emerging Markets 2012-2017 Survey.

Question: Which are the top 5 Emerging Markets for your industry over the next 5 years (TO 2017)? N=395 (Total): N=95 (US), N=161 (Europe), N=44 (Latin America), N=95 (Asia).

Top 10 Secondary Emerging Markets by Location of Headquarters (2012-2017)

Emerging Markets focus to 2017 (All companies)

Page 18: Business Perspectives on Emerging Markets 2012-2017 · Business Perspectives on Emerging Markets 2012-2017 Why this study is important Natan Rodeguero Vice-President, Latin America

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Emerging Markets investment experiences and motivations

(Brazilian companies)

Page 19: Business Perspectives on Emerging Markets 2012-2017 · Business Perspectives on Emerging Markets 2012-2017 Why this study is important Natan Rodeguero Vice-President, Latin America

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50

60

30

40

10

62% Gain foothold for long term success in large future market Gain global market share

34% Our customers are there Tap into short/medium term growth/profit

21% Diversify risks Lack of growth/profit in established markets

Brazilian companies are investing in Emerging Markets to establish a presence in future major markets

19

17% look to Emerging Markets as a low cost supply base

Motivations for investing in Emerging Markets

Experiences & Motivations (Brazilian companies)

Source: Global Intelligence Alliance, Business Perspectives on Emerging Markets 2012-2017 Survey. Respondents were allowed to select more than one.

•  Brazilian companies’ Emerging Markets strategies are primarily driven by the desire to gain a foothold in future large markets and gain global market share.

•  It has become less about capturing lower production costs (17%).

•  34% of Brazilian companies’ customers are in Emerging Markets.

•  21% want to diversify risks in Emerging Markets and 21% think there is a lack of growth/profit in established markets.

•  17% acknowledge their competitors are in Emerging Markets.

Question: What are the main reasons for investing in Emerging Markets for your company? N=29 (Brazilian companies).

20 17% Establish low cost supply base Our competitors are there 14% CEO/board directive

Page 20: Business Perspectives on Emerging Markets 2012-2017 · Business Perspectives on Emerging Markets 2012-2017 Why this study is important Natan Rodeguero Vice-President, Latin America

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45%

30%

21%

14%

15%

21%

14%

15%

16%

5%

10%

11%

5%

5%

11%

10%

4%

17%

15%

16%

2012

2014

2017

0%-10% 11%-20% 21%-30% 31%-50% 51%-60% 61%-80% 81%-100%

Proportion of global revenues from Emerging Markets will continue to grow through 2017

20

All the Brazilian companies surveyed would have entered other Emerging Markets by 2017

% Global Revenue from Emerging Markets (2012-2017)

Source: Global Intelligence Alliance, Business Perspectives on Emerging Markets 2012-2017.

Experiences & Motivations (Brazilian companies)

Question: What % of your company's global revenue do you expect to come from Emerging Markets? N=21 (2012), N=23 (2014), N=21 (2017).

Zero Revenue from Emerging Markets

4.76%

0.00%

0.00%

Page 21: Business Perspectives on Emerging Markets 2012-2017 · Business Perspectives on Emerging Markets 2012-2017 Why this study is important Natan Rodeguero Vice-President, Latin America

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Many Brazilian companies could have done something differently in their Emerging Markets strategies

21

More than 40% would have conducted intelligence/due diligence or adapted to local market conditions

Source: Global Intelligence Alliance, Business Perspectives on Emerging Markets 2012-2017 Survey,

•  16% of the Brazilian companies say they are satisfied with their Emerging Markets strategy. This is higher than the global average (9%).

•  86% would have done things differently with regards to their Emerging Markets strategy.

•  Brazilian companies primarily have two main regrets.

•  Almost a quarter of them would have made greater efforts to conduct intelligence/due diligence.

•  A fifth would have adapted local markets/prices better (20%).

Emerging Markets strategy as of 2012

16% Satisfied with strategy

84% Would have done things differently

Question: Which one aspect of your Emerging Markets strategy would you change if you could go back in time, and how? (Will change vs. Will not change) N=25 (Brazilian companies)

Experiences & Motivations (Brazilian companies)

Page 22: Business Perspectives on Emerging Markets 2012-2017 · Business Perspectives on Emerging Markets 2012-2017 Why this study is important Natan Rodeguero Vice-President, Latin America

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24% of Brazilian companies say they should have conducted intelligence/due diligence better

22

Aspects Brazilian companies (84%) would like to have approached differently

Not adapting to the local emerging market conditions/prices second most commonly cited mistake

Source: Global Intelligence Alliance, Business Perspectives on Emerging Markets 2012-2017 Survey.

Question: Which one aspect of your Emerging Markets strategy would you change if you could go back in time, and how? N=25 (Brazilian companies)

24%

20%

12%

8%

8%

4%

4%

4%

Conducted better intelligence/due diligence

Adapted better to local market/prices

Cultivated stronger local relationships (gov't, partners)

Expedited/improved decision making process

Sought local partners

Addressed supply chain issues first

Dedicated more resources

Entered more quickly

Experiences & Motivations (Brazilian companies)

Page 23: Business Perspectives on Emerging Markets 2012-2017 · Business Perspectives on Emerging Markets 2012-2017 Why this study is important Natan Rodeguero Vice-President, Latin America

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Emerging Markets investment experiences and motivations

(Global companies)

Page 24: Business Perspectives on Emerging Markets 2012-2017 · Business Perspectives on Emerging Markets 2012-2017 Why this study is important Natan Rodeguero Vice-President, Latin America

Technology sector expects the most growth in Emerging Markets, followed by Logistics and Chemical

24

The Resources sector will source the most revenue from Emerging markets; Consumer, Finance and Healthcare the least

Source: Global Intelligence Alliance, Business Perspectives on Emerging Markets 2012-2017

Experiences & Motivations (All companies)

17%

19%

19%

35%

15%

15%

13%

18%

20%

24%

24%

29%

25%

45%

18%

21%

19%

27%

32%

30%

36%

38%

37%

53%

26%

28%

27%

37%

48%

41%

2017 2014 2012

Question: What share of your company's global revenue do you expect to come from Emerging Markets? N=277 (2012), N=268 (2014), N=263 (2017).

% Average Global Revenue from Emerging Markets by Industry (2012-2017)

Page 25: Business Perspectives on Emerging Markets 2012-2017 · Business Perspectives on Emerging Markets 2012-2017 Why this study is important Natan Rodeguero Vice-President, Latin America

US companies are slightly behind the curve on tapping into Emerging Markets revenues

25

Smaller companies are expecting a greater share of revenue from Emerging Markets than larger ones

Source: Global Intelligence Alliance, Business Perspectives on Emerging Markets 2012-2017

Experiences & Motivations (All companies)

Question: What share of your company's global revenue do you expect to come from Emerging Markets? N=256 (Total of 2017): N=86(<0.1 bil Euro), N=62 (0.1 bil-<1 bil Euro), N=108 (=/>1 bil Euro). .

% Average Expected Global Revenue from Emerging Markets (2017)

33%

38%

42%

=/> 1bil Euro

0.1 bil - < 1bil Euro

<0.1 bil Euro

By size of annual revenue

34%

36%

37%

38%

US HQ

Latin American HQ

European HQ

Asian HQ

By location of headquarters

Question: What share of your company's global revenue do you expect to come from Emerging Markets? N=245 (Total of 2017): N=63 (US), N=94 (Europe), N=27 (Latin America), N=61 (Asia).

Page 26: Business Perspectives on Emerging Markets 2012-2017 · Business Perspectives on Emerging Markets 2012-2017 Why this study is important Natan Rodeguero Vice-President, Latin America

TOTAL

(N=425) (N=80) (N=58) (N=49) (N=41) (N=39) (N=38) (N=34) (N=24) (N=20) (N=17)

Distribution / access to customers 35% 41% 36% 22% 37% 49% 37% 15% 21% 50% 29%

Adapting to local culture 28% 25% 34% 37% 24% 26% 11% 29% 17% 25% 24%

Building a strong brand 24% 18% 26% 33% 24% 44% 26% 9% 25% 20% 12%

Local partner(s) 24% 20% 19% 37% 32% 15% 29% 21% 21% 15% 12%

Government relations 23% 13% 21% 33% 32% 13% 24% 32% 21% 5% 24%

Pricing 23% 24% 22% 16% 12% 31% 34% 15% 38% 30% 24%

Localized competitive positioning 22% 21% 28% 20% 2% 10% 32% 18% 38% 35% 35%

Product/service quality 21% 21% 21% 20% 27% 21% 24% 12% 4% 35% 29%

Flexibility as the market develops 20% 19% 22% 18% 17% 15% 8% 21% 25% 10% 18%

Localization of products/services 18% 26% 26% 8% 7% 18% 13% 6% 38% 20% 18%

Finding the right talent 18% 16% 16% 18% 12% 13% 18% 24% 21% 15% 12%

Local business relationships/lobbying 17% 16% 12% 22% 17% 13% 11% 21% 13% 20% 18%

Access to customers is the biggest single Emerging Markets success factor across industries

26

Source: Global Intelligence Alliance, Business Perspectives on Emerging Markets 2012-2017 Survey. Respondents were allowed to select more than one.

Question: In your industry, what 3 key factors will determine which foreign companies succeed in Emerging Markets to 2017? N=425(All companies).

Experiences & Motivations (All companies)

Success Factors for Emerging Markets (2012-2017)

Success Factors

Brand is very important for the Consumer sector; localization least important for the Finance sector

Page 27: Business Perspectives on Emerging Markets 2012-2017 · Business Perspectives on Emerging Markets 2012-2017 Why this study is important Natan Rodeguero Vice-President, Latin America

TOTAL

(N=425) (N=80) (N=58) (N=49) (N=41) (N=39) (N=38) (N=34) (N=24) (N=20) (N=17)

Bureaucracy and red tape 35% 23% 34% 41% 46% 44% 29% 50% 13% 20% 41%

Corruption / weak rule of law 33% 29% 33% 37% 41% 26% 39% 44% 21% 10% 18%

Competition from local companies 28% 38% 21% 29% 15% 28% 42% 9% 46% 30% 24%

Competition from other foreign companies 26% 33% 21% 31% 12% 13% 24% 18% 54% 20% 29%

Economic volatility 23% 28% 14% 22% 37% 26% 24% 21% 21% 20% 24%

Regulations and taxes 23% 25% 16% 16% 22% 33% 26% 26% 21% 25% 29%

Lack of local market understanding at HQ 21% 25% 19% 18% 32% 18% 18% 12% 21% 25% 12%

Political risk 20% 23% 16% 10% 24% 18% 5% 38% 8% 35% 29%

Poor infrastructure 19% 19% 24% 16% 20% 15% 13% 15% 8% 30% 35%

Lack of reliable market intelligence 18% 14% 29% 16% 17% 15% 21% 12% 13% 15% 29%

Unreliable local partners 17% 14% 17% 24% 20% 18% 18% 9% 21% 0% 18%

27 Source: Global Intelligence Alliance, Business Perspectives on Emerging Markets 2012-2017 Survey. Respondents were allowed to select more than one.

Experiences & Motivations (All companies)

Question: In your industry, what are the 3 biggest threats to succeeding in Emerging Markets in the next 5 years (TO 2017)? N=431(All companies).

Threats in Emerging Markets (2012-2017)

Biggest threat across industries is bureaucracy; competition a concern for Auto and Manufacturing

Threats

Page 28: Business Perspectives on Emerging Markets 2012-2017 · Business Perspectives on Emerging Markets 2012-2017 Why this study is important Natan Rodeguero Vice-President, Latin America

China, India and Brazil look good to most industry sectors; Russia has less widespread appeal

28

Healthcare sector is least positive on China, Automotive on India, Energy & Resources on Brazil, and Consumer & Retail on Russia

Top Four Emerging Markets by Industry (2012-2017)

Source: Global Intelligence Alliance, Business Perspectives on Emerging Markets 2012-2017 Survey. Respondents were allowed to select more than one.

Question: Which are the top 5 Emerging Markets for your industry over the next 5 years? (To 2017) N=427 (All companies).

27% 25% 26% 30% 30% 24% 29% 29% 27% 29%

27% 32% 28% 30% 29%

24% 29% 23% 31% 21%

19% 15% 16% 13% 12%

21% 17%

21% 16%

21%

27% 28% 30% 27% 29% 31% 25% 27% 26% 29%

Brazil Russia India China

Experiences & Motivations (All companies)

Page 29: Business Perspectives on Emerging Markets 2012-2017 · Business Perspectives on Emerging Markets 2012-2017 Why this study is important Natan Rodeguero Vice-President, Latin America

Vietnam stands out for Consumer, Logistics and Resources sectors, Mexico for Healthcare

29

Chemical sector very focused on Indonesia and South Africa, Consumer & Retail on SE Asia

Experiences & Motivations (All companies)

Source: Global Intelligence Alliance, Business Perspectives on Emerging Markets 2012-2017 Survey.

Question: Which are the top 5 Emerging Markets for your industry over the next 5 years (TO 2017)? N=427 (All companies).

Top 10 Secondary Emerging Markets by industry (2012-2017)

21% 18% 16% 20% 21% 12% 16% 16%

27% 21%

18% 15%

12%

20% 6%

14% 18% 19%

27%

8%

14% 15%

14%

7% 20%

3%

18% 6%

14%

21%

10% 15% 14%

10% 12%

20%

12%

13%

4%

4%

14% 8%

10% 12% 11%

17%

6% 16%

8%

8%

5% 8%

8% 6% 3% 14% 6% 3%

5%

8%

4% 5% 9% 6%

3%

8% 8%

6%

5%

14%

6% 8% 2% 6%

8%

4% 6%

9%

5% 8%

3% 6% 9% 3% 12% 1% 6% 6%

4% 5% 2% 6% 10%

4% 7% 4% 6% 5% 4%

South Korea Malaysia Thailand Chile Argentina Turkey Mexico Vietnam South Africa Indonesia

Page 30: Business Perspectives on Emerging Markets 2012-2017 · Business Perspectives on Emerging Markets 2012-2017 Why this study is important Natan Rodeguero Vice-President, Latin America

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Emerging Markets intelligence

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Availability, accuracy and completeness of intelligence on Emerging Markets are issues for many

31

Almost half of Brazilian companies find decision making is delayed due to lack of information.

Emerging Markets intelligence

Source: Global Intelligence Alliance, Business Perspectives on Emerging Markets 2012-2017 Survey, N=29 (Brazilian companies).

•  Brazilian companies appreciate the value of market intelligence, with 86% saying that accurate market sizing and growth estimates are critical to their Emerging Markets Strategy.

•  However, only 34% use market intelligence to support their decisions on Emerging Markets, versus a global average of 55%.

•  Moreover, Brazilian companies appear to lack readily available Emerging Markets information more than their global peers. 66% say that information on Emerging Markets is not readily available in their organizations, compared to the global average of 53%.

•  48% say lack of intelligence about Emerging Markets delays their decision making, which is the same as the global average. 41% say decision making on Emerging Markets in their organizations is efficient.

•  However, 90% doubt the accuracy and completeness of the information they have on Emerging Markets.

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42%

6%

3%

6%

44%

18%

10%

22%

9%

23%

12%

24%

4%

38%

40%

34%

1%

15%

35%

14%

31%

3%

0%

0%

55%

17%

7%

21%

14%

14%

3%

21%

0%

45%

45%

48%

0%

21%

45%

10%

Accurate market sizing and growth estimates are critical for our Emerging Markets strategy

Information on Emerging Markets is always readily

available in our organization

Inaccurate or incomplete information about Emerging Markets is never a problem

Large volumes or overflow of information about Emerging Markets is never a problem

Strongly agree Somewhat agree Neither agree or disagree Somewhat disagree Strongly disagree

32

Information on Emerging Markets

Brazilian companies All companies

Source: Global Intelligence Alliance, Business Perspectives on Emerging Markets 2012-2017 Survey, Brazilian companies = 29. All companies = 431.

Brazilian companies lack readily available Emerging Markets information more than global peers 66% say such information is lacking, compared to 53% global average

Emerging Markets intelligence

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18%

17%

4%

37%

33%

18%

21%

31%

30%

17%

17%

38%

7%

2%

10%

10%

10%

4%

24%

31%

14%

17%

35%

34%

35%

21%

34%

14%

3%

14%

All executive decisions on Emerging Markets are supported

by market intelligence

Executive decision making is very efficient in our Emerging Markets

organization

Our decisions are never delayed because we are missing

information about Emerging Markets

Strongly agree Somewhat agree Neither agree or disagree Somewhat disagree Strongly disagree

33

Decision making on Emerging Markets

Brazilian companies All companies

Source: Global Intelligence Alliance, Business Perspectives on Emerging Markets 2012-2017 Survey, Brazilian companies = 29. All companies = 431.

48% say that lack of information delays decisions This is likely to be one underlying factor behind strategic mistakes made in Emerging Markets

Emerging Markets intelligence

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Appendix: Survey Respondents

Page 35: Business Perspectives on Emerging Markets 2012-2017 · Business Perspectives on Emerging Markets 2012-2017 Why this study is important Natan Rodeguero Vice-President, Latin America

29 large and mid-sized Brazilian companies took part in the survey Almost half of them have at least 1,000 employees

35 Source: Global Intelligence Alliance, Business Perspectives on Emerging Markets 2012-2017 Survey, N=29 (Brazilian companies).

43%

28%

7%

11%

11%

< $0.13 bil/0.1 bil Euro

$0.13-<$1.3 bil/0.1-<1 bil Euro

$1.3-<$6.5 bil/1–<5 bil Euro

$6.5-<$13 bil/5-<10 bil Euro

=/> $13 bil/10 bil Euro

% of respondents by annual revenue

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Companies taking part in the survey represented a wide spread of industry sectors

24%

18%

18%

10%

7%

7%

7%

3%

3%

3%

Professional & Business Services

Financial Services

Energy, Resources & Environment

Telecommunication, Technology & Media

Manufacturing & Industrial

Consumer & Retail

Others

Automotive

Construction & Property Development

Logistics & Transportation

% of respondents by industry

Source: Global Intelligence Alliance, Business Perspectives on Emerging Markets 2012-2017 Survey, N=29 (Brazilian companies). www.globalintelligence.com

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About GIA

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GIA is a strategic market intelligence and advisory group

Global Intelligence Alliance (GIA) is the preferred partner for organizations seeking to understand, compete and grow in international markets.

Our industry expertise and coverage of over 100 countries enables our customers to make better informed decisions worldwide.

GIA Group has 11 offices on 4 continents. Together with affiliated GIA Member companies, certified GIA Research Partners and consultants, GIA provides access to local knowledge in over 100 countries.

All GIA Network companies adhere to GIA’s Research and Analysis Quality System as well as the SCIP Code of Ethics.

www.globalintelligence.com | [email protected]

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We help you make better informed decisions

Customized market monitoring solution to boost awareness and collaboration in your organization

Analytical insight and advisory, enabling you to compete more effectively and grow into new opportunities

Valuable information about your markets and industry, on-demand around the world

High-quality intelligence software that enables full control of the intelligence process

A suite of consulting services, events and online resources that help you set up and develop world class intelligence programs

39 www.globalintelligence.com

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International Global Intelligence Alliance Group [email protected] Brazil Global Intelligence Alliance Latin America [email protected] Canada Global Intelligence Alliance Canada [email protected] Czech Republic EasyLink Business Services [email protected] China Global Intelligence Alliance China [email protected] Finland Global Intelligence Alliance Finland [email protected] France RV Conseil [email protected] Germany Global Intelligence Alliance Germany [email protected] Hong Kong Global Intelligence Alliance Hong Kong [email protected] India Global Intelligence Alliance India [email protected] Japan McRBC [email protected] Korea 3mecca [email protected] Latvia Gateway Baltic [email protected] Mexico Americas Market Intelligence Mexico [email protected] Netherlands Global Intelligence Alliance Netherlands [email protected] Portugal Growth Setting [email protected] Russia ALT R&C [email protected] Singapore Global Intelligence Alliance Singapore [email protected] South Africa Butterfly Effect Intelligence [email protected] Tunisia RV Conseil Tunisie [email protected] UK Global Intelligence Alliance UK [email protected] United Arab Emirates GCC Consulting [email protected] USA East Coast Global Intelligence Alliance USA East Coast [email protected] USA Florida Americas Market Intelligence Miami [email protected] USA Midwest Global Intelligence Alliance USA Midwest [email protected]

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