lourdes casanova senior lecturer and academic director emerging markets institute s.c. johnson...

Lourdes CasanovaSenior Lecturer and Academic Director Emerging Markets Institute S.C. Johnson School of ManagementCornell University

Emerging Multinationals: Navigating a Dynamic Sector

Past Publications

http:www.globallatinas.orgCoautorahttp:www.innovalatino.org

Coautho with Julian Kassumhttp://brazildream.comhttps://www.facebook.com/thebrazildream

Agenda

•New Reality: Soft/Hard Power• Emerging Multinationals•Case Study: Uniqueness of

Emerging Multinationals• Takeaways

New Reality Emerging MNC’s Case Study Takeaways

Source: Authors

Emergence of a Global Power, In Search of the Brazil Dream: Soft/Hard Power (J. Nye 1980’s)

SOFT POWER

Strengths: - Diplomatic capabilities- Economic Model: Brasilia consensus- Political-value system- Culture, language, history

Weaknesses: - Education- Violence- CorruptionLack of global integration

HARD POWER

Strengths: - 7th Economy and human capital- Natural resources , manufacturing services- Multinational companies

Weaknesses: - Competitiveness & innovation- Taxes- Military

PovertyInequality

In Search of the Brazil Dream

• Looking for Brazil’s dream• US’s productivity and innovation• Europe’s multilateralism• China’s willpower• And Searching for a Second Wind

Agenda

•New Reality• Emerging Multinationals•Case Study: Uniqueness of

Emerging Multinationals• Takeaways

New Reality Emerging MNC’s Case Study Takeaways

2014Emerging MNC Country Sales

Marketcap

2 Sinopec Group China 486 *5 China National Petroleum China 455 *8 State Grid Corporation of China China 338 *15 Samsung South Korea 216 18116 China Railway Corporation China 172 *19 Gazprom Russia 164 14528 Petrobras Brazil 144 17130 Lukoil Russia 139 5134 Hon Hai China 134 4139 Pemex Mexico 127 *

Fortune Global 500 Emerging MNCs, US $ bn

Source: Fortune Global 500, 2013.

New Reality Emerging MNC’s Case Study Takeaways

A Champion of Soft Power

A Hard Power Nation in the

Making

What Will Propel Brazil Forward? Takeaways Conclusion

Largest Latin American Firms in Fortune Global 500 (2014)

Source: Fortune Global 500, 2012.

EMNCs Growing 152 of Global 500

RECORD IPOs :- Brazilian state oil company Petrobras raised $70 billion (Sept. 2010)

- General Motors raised $22.1 billion (Nov. 2010)

- The Agricultural Bank of China raised $22.1 billion (July 2010)

New Reality Emerging MNC’s Case Study Takeaways

Source: Authors based on Global 500 Ranking Fortune

A Champion of Soft Power

A Hard Power Nation in the

Making

What Will Propel Brazil Forward? Takeaways Conclusion

Evolution of Nr of Companies (Fortune Global 500 Ranking )

Source: Authors based on 2013 Global 500 Ranking Fortune

A Champion of Soft Power

A Hard Power Nation in the

Making

What Will Propel Brazil Forward? Takeaways Conclusion

Number of Fortune Global 500 per

country

Nominal GDP

Nominal GDP and Number of Fortune Global 500 per Country 2014 Edition

Not Enough Brazilian big firmsToo Domestic

Agenda

•New Reality• Emerging Multinationals•Case Study: Uniqueness of

Emerging Multinationals• Takeaways

New Reality Emerging MNC’s Case Study Takeaways

• Defining Global Latinas: ownership, geography, and nationality• Excluded 100% state-owned, financial institutions in 1st phase• Assets in US or EU (coming of age)• Unambiguous nationality

• Ad hoc sample (21): variety of sectors, sizes, public/private entity structure, and countries• Mexican companies: América Móvil, Bimbo, Cemex

• 2nd phase: Grupo Carso, Grupo Modelo, Televisa, TV Azteca• Brazilian companies: Vale, Embraer, Petrobras,

• 2nd phase: Banco Itaú, CSN, Pão d’Açucar, Sadia• Emerging Global Latinas (SMEs): Concha y Toro (Chile), Natura &

Politec (Brazil), Pollo Campero (Guatemala) and Astrid y Gastón (Perú)• 2nd phase: Chile & Argentina: Grupo Luksic, Techint/Tenaris

Global Latinas IDB/INSEAD Project

New Reality Emerging MNC’s Case Study Takeaways

1. Why have Latin American firms emerged and expanded beyond their own regional markets?

2. What strategies have Global Latinas adopted to expand their operations?

3. What characteristics do Global Latinas possess (business model, strategy and operations) that differentiate them from MNCs from developed economies?

Questions and Methodology

• Data: ECLAC, América Economía, IADB, UNCTAD

• Company reports, SEC filings, and Investment bank reports

• Company visits and personal Interviews with top managers through open questionnaire.

QUESTIONS METHODOLOGY

New Reality Emerging MNC’s Case Study Takeaways

• Strong leadership at the top with long-term vision• Internationalization as learning process/hedging• Fast acquisitions to gain scale

• Business model innovation with efficiency in operations• Understanding needs of the bottom of the pyramid• Ability to navigate through major crises • Flexibility and ability to adjust• Ownership: Family business and SOEs and National

Champions, Brazil

Unique Characteristics

New Reality Emerging MNC’s Case Study Takeaways

• As a state of Mind• From R&D to Customers, Suppliers, Employees, Partners

• Capacity of knowledge absorption• High Speed Trains in China• Partnerships with Mitsubishi, Alstom, Siemens

• Solar Panels In China• Buying Companies in California

• IT companies in India• Mythical Silicon Valley: Dense network of companies,

universities, VCs• CornellTech

Open Innovation

New Reality Emerging MNC’s Case Study Takeaways

Agenda

•New Reality• Emerging Multinationals•Case Study: Uniqueness of

Emerging Multinationals• Takeaways

New Reality Emerging MNC’s Case Study Takeaways

• Innovation is a global Game• No choice• Actively search for new ideas everywhere.• Cisco looking at startup companies• First go inside the company, then domestic

and then Go global

Takeaways

New Reality Emerging MNC’s Case Study Takeaways

Lourdes CasanovaSenior Lecturer, Academic Director Emerging Markets InstituteJohnson, Cornell Universitylourdes.casanova@cornell.eduwww.linkedin.com/pub/lourdes-casanova/0/23a/11@lourdescasanova

Thank You!