Global Expansion to Improve in 2017, Says Frontier Strategy Group

Analysts for Frontier Strategy Group (FSG) – an information and advisory services firm for emerging market executives – expect a slight improvement in global expansion in 2017.

In a recent FSG report, the forecast is for expansion of 2.8%. This is up from 2.5% last year, but analysts caution that the growth “trajectory” won't be a straight line.

Indeed, analysts say “dramatic global forces of change” observed in 2016 shapes their forecast for this year.

In Asia, businesses in the region will face an opportunity to solidify their position in the global market portfolio, given the region's continued growth forecast for 2017 and beyond.

“To capitalize on this opportunity, regional executives must focus on the implementation and execution of several key strategic initiatives,” says Adam Jarczyk, Director of Asia Pacific Research.

These include effectively managing direct and indirect distribution channels, and addressing evolving customer segments through the introduction of new products, development of digital strategies, and adoption of emerging trends as the market continues to evolve.

“Careful market prioritization will be critical for businesses looking to successfully expand into new clusters and grow their portfolio in the region,” Jarczyk adds.

Editor's Note: In this exclusive SCMR interview, Adam Jarczyk, Director of Asia Pacific Research, shares additional insights gleaned from the recent study

Supply Chain Management Review: Can you give us an example of how some multinationals in China have designed their channel to effectively serve the country's city clusters?

Adam Jarczyk: Certainly. Many multinationals that want to fully capitalize on China's urbanization trends have begun using a blueprint from Beijing to inform their distributor selection and salesforce management.

SCMR:Working closely with the government, too?

Jarczyk: In some cases, executives are using the government's plan to identify and fill gaps in their current distributor network. In others, executives are structuring their sales teams and evaluating the need for new hires with the assistance of city and industry cluster maps derived from China's urbanization blueprint.

SCMR: How should B2C companies evaluate Indonesia's dynamic consumer landscape?

Jarczyk: B2C companies operating in Indonesia need not cover the entire country to tap into its rapidly growing consumer base. Indeed, given the archipelago's expansive geography and poor infrastructure, executives must take a targeted approach to investment.

SCMR: So what is your advice?

Jarczyk: With this in mind, we suggest that B2C companies evaluate the market by combining top-down and bottom-up approaches to evaluate market opportunity and then use this analysis to determine how best to allocate resources.

SCMR: Finally, how do multinationals develop a robust digital strategy to tap into the growth of India's online channels?

Jarczyk: Multinationals should maintain realistic expectations and actively plan for the future when developing a digital strategy for India. The country's e-commerce market is still in the early stages of development and remains concentrated in and around large urban centers. As a result, companies should be patient when calculating returns on investment and concentrate on preparing for the future. As connectivity improves and GST reform makes achieving scale easier, online channels will allow companies to leapfrog traditional distribution channels, particularly in rapidly growing tier-2 and tier-3 cities.

You can download the full Frontier Report Here.

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