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At this year's 50th Annual SAMA Conference, Blue Canyon Partners Principal David Hartman delivered an intriguing look towards where growth was coming from around the world. Questions addressed included, "Where is growth coming from and what should today’s business leaders expect?" "What will the impact of a continuing search for global growth among customer organizations be on strategic account management?"
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© 2014 Blue Canyon Partners, Inc.
Around the World in 18
Minutes
SAMA 50th Annual Conference
May 22, 2014
© 2014 Blue Canyon Partners, Inc.
Around the world in 18 minutes
David G. Hartman, Principal, Blue Canyon Partners
© 2014 Blue Canyon Partners, Inc.
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%
© 2014 Blue Canyon Partners, Inc.
Around the World (of Market Growth)
As recently as 2002, North
America and Europe
accounted for 70% of
global market growth
Sources: 2002 World Bank, WDI, Blue Canyon analysis
Percentage of 5-Year Global GDP Growth
Accounted for by Selected Regions
© 2014 Blue Canyon Partners, Inc.
In the five years to 1992,
Asian developing
countries accounted for
less of global market
growth than Japan alone
Other Markets were
very small
Around the World (of Market Growth)
Sources: 1992, World Bank, WDI, Blue Canyon analysis
Percentage of 5-Year Global GDP Growth
Accounted for by Selected Regions
© 2014 Blue Canyon Partners, Inc.
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
Percentage of 5-Year Global GDP Growth
Accounted for by Selected Regions
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%
© 2014 Blue Canyon Partners, Inc.
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
© 2014 Blue Canyon Partners, Inc.
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
© 2014 Blue Canyon Partners, Inc.
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.