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Six Mideast companies make the Cut on BCG's 2014 list of 100 global challengers [Kuwait Times]
[September 25, 2014]

Six Mideast companies make the Cut on BCG's 2014 list of 100 global challengers [Kuwait Times]


(Kuwait Times Via Acquire Media NewsEdge) KUWAIT: Six companies from the Middle East were named 'global challengers' by The Boston Consulting Group (BCG), a recognition of their rapid growth, global expansion and emerging position as leaders in key markets. These organizations include Emirates Global Aluminium, Etihad Airways, Etisalat, Qatar Airways, SABIC and El Sewedy Electric. The 2014 BCG Global Challengers report sheds light on the innovative business models, strategies, and challenges arising from emerging markets. Entitled Redefining Global Competitive Dynamics: 2014 BCG Global Challengers, the study also highlights how these companies are rapidly gaining success in developing capabilities beyond low-cost manufacturing.



A global perspective The analysis' 2014 edition marks BCG's sixth report since 2006 to identify 100 fastgrowing companies that are from emerging markets and are shaking up the global economy through success overseas. This year's list of BCG global challengers reflects the reshaping of the global economy, as the number of emerging markets represented is larger than ever. The list features companies from 18 countries – eight more than on the original 2006 list -including Qatar, Saudi Arabia, Egypt and the United Arab Emirates.

The BRIC nations of Brazil, Russia, India, and China, once home to 84 challengers, are now down to 65. From 2000 through 2013, the revenues of the challengers as a group grew at an annual average rate of 18 percent. From 2008 through 2013, the 2014 BCG global challengers increased their employment by 32 percent, compared with 11 percent for the nonfinancial S&P 500. Even more striking, the average revenue per employee of the global challengers exceeded that of the nonfinancial S&P 500 companies – $479,000 compared with $440,000. Several of the new global challengers come from new categories, including quickserve restaurants and beverages.


These additions show both the growing purchasing power of the middle class in emerging markets and the success of companies in developing capabilities beyond low-cost manufacturing. "Eight years ago, when we created the global-challenger list, it was dominated by Chinese and Indian manufacturers that largely competed on the basis of low costs," said Thomas Bradtke, Partner and Managing Director in BCG's Dubai office and originator of BCG's Global Challenger report series in 2006. "Today, the global challengers come from a much wider range of industries and countries-and increasingly from consumer goods sectors." Global challengers A total of six global challengers from the Middle Eastare part of BCG's 2014 list of 100 Global Challengers. In 2013, there were only four global challengers from the region. This year, the Middle East is also home to two 'graduate' companies, Saudi Aramco and Emirates. These international players-both of which also featured in last year's roster of 'graduates' – are starting to closely resemble established multinationals. They are becoming true global leaders in their respective fields. Emirates Airline has reported a remarkable record of 25 consecutive profitable years. In parallel, Saudi Aramco is, today, the largest integrated global petroleum enterprise in the world, with ventures all over the globe. In 2014, Saudi Arabian chemicals giant SABIC and Egypt's Elsewedy, a leading manufacturer of electrical wires and cables, cemented their status as global challengers for the fourth consecutive year.

Both companies continue to impress with their scale, international market positions and excellence in operations. Abu Dhabi's Etihad Airways and Qatar Airways, two of the fastest-growing airlines in the Middle East have also made both the 2013 and 2014 lists. In recent years, both airlines have succeeded in leveraging the region's favorable geostrategic location as a transportation hub at the crossroads of Asia- Pacific, Europe, and Africa. Etisalat, the region's largest telecommunications operator, andEmirates Global Aluminium, the fifth-largest aluminum company, are the two newcomers from the Middle East on BCG's 2014 list of 100 Global Challengers. Etisalat currently operates in 19 countries in the Middle East, Asia and Africa, including Nigeria, the continent's largest economy.

The company expanded its African footprint in May when it acquired a controlling stake in Maroc Telecom from Vivendi. The acquisition helped boost second-quarter profits by 27 percent. Global challenger Emirates Global Aluminium is the product of a merger between Dubai Aluminium and Emirates Aluminium, two state-owned enterprises. In 2012, the last year for which data is available, the companies collectively generated $4.3 billion in revenues. The new company expects to generate $6.6 billion in 2015 by taking advantage of the Middle East's strategic location for serving global markets.

The company has customers in nearly 70 countries. "The six Middle East challengers for 2014 are growing up rapidly, relying on innovation, talent and other strengths to win," added Cristiano Rizzi, Partner and Managing Director in BCG's Dubai office."Their work, however, is not done. To become global leaders, they need to develop even deeper benches of talent and strengthen current people practices. And, as the cost advantage of global challengers shrinks, they need to become increasingly innovative – not just pouring money in R&D but also developing a strategic technological landscape and their place within it."    All rights reserved.

(c) 2014 Kuwait Times Newspaper Provided by SyndiGate Media Inc. (Syndigate.info).

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