Article Summary:
This is a fairly recent article, written in 2012 that takes a look at the need for global
companies to rethink their operating models. According to the article, there has been a
major disruption in the nature of consumer markets. Both the demand side and the supply
side have shifted from the mature, western economies to the emerging nations. These high
growth emerging markets are distinct from one another in terms of the speed of the market,
the drivers of demand and consumer preferences, and the regulatory and investment
climate. These shifts have created a multipolar world that has multiple centers of power
and influence that are changing the way business is done. The article also challenges the
companies to move away from their legacy model of supporting the old homogenous
business environment. It also asks the question – Does a company even need a HQ? How
can companies balance local autonomy with standardization? And where should the talent
come from? The answer according to the article lies in the three key themes that have
emerged as enablers of success:
•A new balance of power in organizations – As companies realize that more than
50% of their revenues and profits are likely to be generated by emerging markets,
they need to start thinking of long term potential. These companies need to
carefully consider where their areas of potential growth lie and recalibrate their
organizational balance of power accordingly. Regional cluster model is also helping
companies reap the benefits of customer proximity as well as economies of scale
