UAE. Six companies from the Middle East – Emirates, Saudi Aramco, Qatar Airways, Etihad Airways, SABIC and Elsewedy – have featured in the Boston Consulting Group’s (BCG’s) 2013 ‘Global Challengers’ report.
Titled Allies and Adversaries, the report identifies 100 ‘global challenger’ companies from the emerging markets that are growing so quickly that they are reshaping industries and surpassing many traditional multinational companies.
Allies and Adversaries is the fifth in a series of BCG annual Global Challenger reports identifying the fastest-growing companies in the emerging markets. It is also part of BCG’s Game-Changing Program to help leaders and their companies capitalize on the opportunities created by these seismic shifts in the global economy.
In Allies and Adversaries, BCG finds that global challenger companies are outpacing household names in the U.S. and Europe and are having a profound impact on the global economy. They come from 17 countries—with companies from Colombia and Qatar joining the list for the first time. Also for the first time, the global list includes companies from the financial services, health care equipment, and electronic commerce sectors.
In the past five years, these companies—many of them little known in the West—have added 1.4 million jobs, while employment at the nonfinancial S&P 500 stayed flat. Their average revenue was $26.5 billion in 2011, the most recent year for which figures are available, compared with $21 billion for the S&P 500’s nonfinancial companies and $20 billion for the entire S&P 500. In the same year, they purchased more than $1.7 trillion of goods and services and invested more than $330 billion in capital expenditures.
“If ever there was a wake-up call for business leaders in the West, this is it,” said David C. Michael, coauthor of the report, head of BCG’s globalization practice, and coauthor of a new book called The $10 Trillion Prize: Captivating the Newly Affluent in China and India (Harvard Business Review Press). “We have been monitoring the rise of global challenger companies for nearly a decade, and the ambition of these companies—what we call the accelerator mindset—has never been stronger.”
Global Spotlight on the Middle East
In 2013, the Middle East is represented by four global challenger companies and maintains its share in the BCG Global Challenger top 100 list over previous years. The region is also home to two ‘graduate’ companies in the 2013 report.
Maintaining their status as global challengers, Saudi Arabian chemicals giant SABIC and Egypt's Elsewedy, a leading manufacturer of electrical wires and cables, continue to impress with their scale, international market positions and excellence in operations in the latest BCG study.
New to the list are Abu Dhabi's Etihad Airways and Qatar Airways, two of the fastest growing airlines in the Middle East. Both companies have been leveraging the region's favorable geostrategic location as a transportation hub at the crossroads of Asia-Pacific, Europe, and Africa.
In addition to these four global challengers, Emirates and Saudi Aramco have joined the BCG challenger ‘graduate’ list. This list contains companies that have moved from global challenger to global leader status in recognition of their outstanding achievements, rivaling or often exceeding the achievements of long-established incumbent players in their respective industries.
“The Middle East upholds it reputation as a truly dynamic region as we witness global challengers emeriti Emirates and Saudi Aramco establish themselves as true international players. Emirates Airline has reported a remarkable record of 24 consecutive profitable years, and its orders for the Airbus A380 superjumbo airliner exceeded that of any other airliner by three times. Similarly, Saudi Aramco is the largest gas and oil company in the world, and has engaged in ventures all over the globe in its quest to become a global integrated energy business,” comments Thomas Bradtke, Partner and Managing Director in BCG's Dubai office and originator of BCG's Global Challenger report series in 2006.
“Our four Middle East challengers for 2013 have equally promising forecasts, and are playing a significant role in the global economy. The number of passengers transported through and within the Middle East has grown 15% per annum over the past years, due in large part to the significant investments that challengers Etihad and Qatar Airways have been making in meeting the needs of the global middle class.
"These megacarriers, along with emeritus Emirates, are reshaping the international aviation landscape. SABIC and Elsewedy are playing equally influential roles in transforming the chemical and manufacturing industries,” Bradtke concludes.
Methodology for Selecting the 2013 BCG Global Challengers
Produced by BCG’s Global Advantage practice area, the report is based on a comprehensive screening of thousands of companies from emerging markets conducted by BCG experts in each such market. Companies generally need to have annual revenues totaling at least $1 billion and overseas revenues of at least 10 percent of total revenues, or $500 million.
The screening measures the size of each company relative to other challengers and to multinational competitors in their industries. It also analyzes each company’s international presence, the number and size of its international investments, its M&A activity over the past five years, and the strength of its business model. The team excludes those companies that pursue only low-end, export-driven businesses.
A copy of the report can be downloaded at www.bcgperspectives.com.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world’s leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 78 offices in 43 countries.
BCG serves the Middle East from Abu Dhabi and Dubai. Our offices there, in conjunction with the BCG office in Casablanca, play a key role in serving clients in the rapidly developing Gulf region as well as Middle East North Africa (MENA). To date BCG has successfully conducted assignments in the Middle East serving clients across a wide range of sectors, including government, financial services, energy, industrial goods, telecommunications, real estate, healthcare and private equity.
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The BCG Game-Changing Program
We are living in an age of accelerating change. The old ways are rapidly becoming outdated, obsolete. New opportunities are opening up. It is clear that the game is changing. At BCG, we are optimistic: we think that the fundamental drivers of growth are stronger than they have ever been in human history. But to capitalize on this trend, leaders need to be proactive, to challenge the status quo, to make bold moves: they need to change the game, too. The decisions they make now, and over the next ten years, will have an extraordinary and enduring impact on their own fortunes as well as those of their organizations, the global economy, and society at large. To help leaders, and to mark our fiftieth anniversary, BCG is pulling together the best ideas, insights, and ways to win—to own the future. This report is part of that endeavor.
About Thomas Bradtke
Thomas is a partner in BCG's Dubai office. He has been in the UAE since 2005. He has worked with a broad range of private sector companies as well as governments and public organizations around the world. Mr. Bradtke’s work has been focused on developing and implementing growth and transformation strategies in more than twenty countries, including the Gulf, South East Asia, India, China, Russia, and Brazil.
He is leading BCG’s Industrial Goods, Operations and Global Advantage practice areas in the Middle East. He is a regular speaker at major events and has authored several BCG publications on strategies for rapidly developing economies.
Prior to BCG Dubai, Mr. Bradtke worked in BCG’s offices in Munich, Bangkok, and Boston. Prior to BCG, Mr. Bradtke worked for more than three years with the BOSCH Group in the U.S., Germany, and Japan.
Mr. Bradtke holds an M.B.A. from Harvard Business School and a German bachelor’s degree in business administration. He is an avid traveler and has explored close to 100 countries, on business and pleasure.