The inexorable rise of the ‘emerging’ markets

A couple of interviews, data points over the last few days that brought home the significance of ‘emerging’ markets for me. For companies such as Coca Cola (HBR interview with CEO here), Heinz (HBR interview with CEO here) and YUM (owners of Pizza Hut, KFC et al), the US seems like a ‘has been’. Some points:

• In the next 10 years, we will see ~1 billion new middle class people across the globe
• 20% of Heinz’s revenues will come from emerging markets this year compared to less than 5% a few years ago. Wow.
• In the US, if a CPG company gets shelf space at Safeway, Kroger and WalMart, that covers ~100% of the market. In India, the organized sector covers <15%. In Russia, 40%
• 65% of YUM’s profits now come from outside the US; it opens ~1000 ‘units’ a year across the world

There’s a clear dicotomy of markets here – one that is slow (moribund?), the other that’s on a tear (but overheating?).

Email me if you need the articles, sources.

Digital fabrication

Another article on digital fabrication, this time from Booz’s S+B magazine. Although this seems far from disrupting complex manufacturing (think an airplane), it seems ripe for upending entire business models for companies with simpler products (think an iPhone cover). Should be a must read for anyone involved in manufacturing strategy.

BTW: The Economist had a great article about this a while ago as well.

Interesting numbers from airlines, telecom…

A few interesting numbers:

• Typical time to board a plane of 12 rows using the zones method takes ~7 minutes¹ .A typical airline spend $30 per minute a plane is on the ground. [Airlines]
• Market size for lawyer services in the US – $170B² [Consulting]
• ~60% of Americans who call internationally still use their land lines or cell phones³. [Telecom]
• Number of BoA branches in the US is ~5000 [Banking]

 

Sources:

1. The Physics of plane seating – http://online.wsj.com/article/SB10001424053111904716604576542261112635544.html?KEYWORDS=the+physics+of+plane+seating
2. Not enough lawyers – http://www.economist.com/node/21528280
3. Why TV Firms Can’t Take Couch Potatoes for Granted – http://online.wsj.com/article/SB10001424053111903461304576524342801116126.html

Five ideas to fix strategy consulting

A recent article in the Economist about how a bunch of firms are trying to upend the legal services business got me thinking about strategy consulting. The global consulting industry (>$300B market size) has been operating in pretty much the same way for the last 100 years. Clients come up with a problem (e.g. Ways to improve market share in a country). They research consulting companies, issue a RFP etc. to choose the company to help them.

This normal way is slow (it typically takes about 4-8 weeks to choose a partner), it’s inefficient (it doesn’t do a good job of matching available talent or matching pricing with demand/supply) and it fails to tap into a wider set of people for decisions (just having a bunch of Harvard MBAs is impressive, but today’s decisions require a broader set of perspectives). Although one can look at this from a consulting firms’ perspective, I thought it would be more useful to look at it from a buyer’s perspective (I used the framework outlined in Blue Ocean Strategy – a good read)

 

 

What do you think? How would you change the normal ways of working?

Hack: Packable perfume or cologne to workaround 3oz rule

If the 30z rule has been frustrating your desire to smell nice, help is on the way. Travalo has a neat little atomizer that fills right from your perfume or cologne bottle. Mercifully, it seems to be available in colors other than bright pink.