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EXECUTION AS STRATEGY

How emerging market multinationals thrive amid turbulence

GROUP 7 Executive 46 29111311 Haidir Afesina 29111337 Chindia Ferdinansari 29112132 Rohimat Effendi

Global Emerging Markets 2012 - 2017

An emerging market : a nation with social or business activity in the process of rapid growth and Industrialization

Julien Vercueil display an emerging economy characteristics!: 1.! Intermediate income!: its PPP per capita income is comprised between 10% and 75% of the average EU per capita income. 2.! Catching-up growth! narrowed the income gap with advanced economies. 3.! Institutional transformations and economic opening!: which contributed to integrate more deeply into the world economy.

Strategy in Developed Emerging Market

Strategies and Consequences

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political instability, domestic infrastructure problems, currency volatility and limited equity opportunities local stock exchanges may not offer liquid markets for outside investors. !! Short term, quick and effectively !! Impatient changes !! Higher appetite for risk !! Higher tolerance for failure !! To be able to function in chaotic, unpredictable business environment

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1. The meaning of Execution as Strategy

IMPLEMENTATION with the RIGHT DISCIPLINES

higher appetite for RISK and higher TOLERANCE for failure Grab OPPORTUNITIES and GOAL ADAPTATION in real time !! executing first and analyzing later !! pursuing headlong expansion !! embracing turbulent markets

FOCUS & ACTION MINDSET

!! Unpredictable business environments !! Regulations may change unpredictably !! Political instability many executives think coming up with plans is more important than carrying them out

2A. Mexico`s Bimbo Bakery (Part 1)

A bread baker that uses Execution Excellence to rapidly changing circumstances and customer preference.

BIG Business from LOW Margins

Founded in 1945 Initially low-cost & relatively unsophisticated ways to grow CEO understand that in low-margin business: EXECUTION IS CRUCIAL In 2010, Sara Lee sold the bread business to Bimbo because it had been declining which cause by lack of focus on maintaining high standard of execution !! Expand to China " need to adapt customer trends !! !! !! !! In China bread is not more than culinary footnote, but Bimbo successfully offering individually wrapped snacks such as beef rolled in bread

2A. Bimbo Bakery (Part 2)

!! Implementing Cost Leadership Strategy 1.! Efficiency in oven utilization, 2.! Production in the right moment of highly perishable product and reasonable costs, 3.! Never stop search ways to eliminate waste & increase efficiency of operations 4.! Effective and efficient delivery routes a.! Tricycle delivery bikes in China urban area because the streets are too narrow for truck b.! Using sophisticated computer systems to optimize delivery routes !! Focus on Execution than on detailed planning : Experiments, gets market feedback quickly, and does whats needed to improve its value proposition to customers The only way for Emerging Multinational Company can compete with better-capitalized rivals is keep cost very low through combination of operational excellence and cheap labor (CEO BIMBO)

2B. India`s OCIMUM Bio Solutions

A genomics company that pursues headlong expansion even in the of setbacks
!! Major Player in the Indian bioinformatics industry !! Impatient to expand internationally !! Never fully comfortable in their domestic markets Developed-world firms often formulate their overseas plans in terms of decades. ! Mc Donald " half century to generate more sales abroad than in US ! Swedens H&M " 50 years before venturing into the US !! Only took 5 years (2005) to expand internationally a.! first in Europe " buy a division of Germanys MWG (leading genomics company in the Europe at that time) " Valuable Technology & ready-made sales team for unfamiliar market b.! 2006" acquire division of Isogen Life Science in a Dutch c.! 2007" acquire division og Gene Logic in a US !! 2011 " the company stumbled US Pharmaceutical firms forced them to put its American subsidiary up for sale. Despite the US setback, the company made plan to expand significantly to Malaysia " Risk Taker

2C. Egypt`s Orascom

Telecom firm that embraces the chaos inherent in doing business in rough and tumble markets like its own
!! Founded in 1950 !! Initially known as Construction Firm which build everything from highways to shopping mall !! In 1994, Orascom Group enter the Telecommunication Sector with purchasing of InTouch, domestic internet service provider. Developed-Multinational Company often shy away from turbulent region BUT Many emerging multinationals have been toughened by such environment

!! Orascom entered turbulent hotspot, such as: Jordan (1999), Yemen (2000), Pakistan (2000), Zimbabwe (2000), Algeria (2001), Tunisia (2002), Iraq (2003), Bangladesh (2004), North Korea (2008), Burundi (2008), Central African Republic (2008), Namibia (2009), and Lebanon (2009) !! Implement hybrid approach to investing in high-risk countries: Combining proactive negotiations with the government and a defensive strategy of taking small steps 6th Largest Communication Firm in the world

3. The essence of Execution as Strategy

Strategic execution in global emerging economy : 1.! Need to be able to function in chaotic 2.! Facing unpredictable business environment Execution becomes vital due to : !! Highly dynamic competitions !! To grab any opportunities : ! quick and effective ! Different customer preferences & behavior

The Essence : Executions should be adaptive !! to optimizing as much opportunities, and !! to face any risks and threats !! achieving sustainable global business growth