Around the World in 18 Minutes

© 2014 Blue Canyon Partners, Inc.

Around the World in 18

Minutes

SAMA 50th Annual Conference

May 22, 2014


Around the world in 18 minutes

David G. Hartman, Principal, Blue Canyon Partners


Around the World (of Market Growth)

Developing Asia - 60% of all

the market growth in the

world, nearly 40% in China

Japan and Europe have been

in decline

The US has done better, and

population growth points to a

more dynamic future

Regions not shown account

for about 30% of global

growth, 3x as high as in the

90’s and higher even than

during the oil crises of the 70’s

Sources: 2012, World Bank, WDI, Blue Canyon analysis

Percentage of 5-Year Global GDP Growth

Accounted for by Selected Regions

Population Growth Last 10

Years

S Asia 15%

Rest of E Asia 12%

North America 9%

China 5%

Europe 4%

Japan 0%

Russia -1%



As recently as 2002, North

America and Europe

accounted for 70% of

global market growth

Sources: 2002 World Bank, WDI, Blue Canyon analysis




In the five years to 1992,

Asian developing

countries accounted for

less of global market

growth than Japan alone

Other Markets were

very small


Sources: 1992, World Bank, WDI, Blue Canyon analysis




Around the New Frontier Other than Argentina and

Vietnam, the Frontier

Markets are outside Asia

and Latin America

With global growth faltering

over the past 5 years,

Middle East and Africa

are home to some

substantial growth

Population trends also

provide a basis for

continued long-term growth

in those regions….or

continued poverty



Sources: 2002 and 2012, World Bank, WDI, Blue Canyon analysis

2012

2002

Population Growth Last 10 Years

Sub-Saharan Africa 30%

Middle East 22%

Latin America 13%

Developing Europe &

Central Asia

6%


But Don’t Forget the New Frontier in China

Interior regions have per capital

incomes a fraction of the most

developed provinces along the coast

Wage increases faced by foreign and

Chinese manufacturers are far less

burdensome in the poorer regions

where new development is taking place

Beijing, Shanghai, and Guangdong

have fallen to the bottom

Companies looking for new “frontier

markets” should look at the low-

income regions of China as well as

outside

Sources: China National Bureau of Statistics, Blue Canyon analysis


What Else Is New in Frontier Markets?Chinese Companies as Strategic Accounts and as Competitors

Where China has Been

and Where China is

Headed as a Global

Competitor

1. Command and control

to largely market-driven

2. Now a “must-win”

market, needing

partners to support them

3. Formidable competitors


Succeeding with Strategic Accounts

in Frontier MarketsLesson What it Means

Lack of a sophisticated B2B

distribution infrastructure (e.g., factory automation)

Logistics may be handled by Channel

Partners, but solutions will be delivered by

the Supplier, directly to Strategic Accounts.

Importance of after-sale service (e.g., home renovation tools and equipment)

Strategic Account buyers will need more

hand-holding than is typical in mature

markets. In some cases, entire new roles

will need to be taken on by the Supplier.

Importance of initial sales,

versus the aftermarket(e.g., automobile parts)

When markets are new, there may be a very

small aftermarket because original products

are too new to need parts and service.

Focusing on original sales may be the only

way to establish Strategic Account

relationships.


David G. [email protected]

@bluecanyonptrs

mailto:[email protected]

Business

Around the World in 18 Minutes