Emerging Markets Practice Brochure and Service OfferingsDocument Transcript
www.pwc.com Managing emerging market opportunities and risks Strategic services to win in the new global economy Capturing business growth Illuminating the OpportunitiesNovember 2012 amidst intensified competition and Risks As companies and investors seek The complexities of this new environment growth around the globe, they are call for changes in corporate strategies facing more extensive and rapidly and the tools to implement them: changing forms of economic • The perceived business risks in many competition not only within emerging EMs are actually overstated while markets (EMs)—defined as the “BRICs” the returns understated. Needed: plus most other developing countries— better data on market but by new players from EMs, in third- competitiveness and size, rebalanced country markets and even at home. metrics, and more sophisticated due Over the past two decades, EMs have diligence techniques to expose on- grown twice as fast as advanced markets the- ground risks and opportunities. (AMs). And despite the severe downturn • The government and other vested and anemic recovery in AMs, EMs interests in EMs are often closely, if not generally were more resilient to the global directly, involved in business, often crisis and are expected to continue to grow opaquely. Needed: identification and 2 times the rate of AMs over the next 20 relative importance of local stakeholders years, due to the exponential expansion of and assessment of a burgeoning middle class and the ability incentives/disincentives that can to leapfrog legacy technologies. Parties— engender desired conduct/ companies and investors, including performance by them. sovereign wealth funds and other governmental interests—who do not • Financial assistance and a myriad of position themselves now to exploit the new policy interventions from multilateral opportunities and mitigate the risks, development banks and non-traditional whether related to inbound or outbound donors will continue to be a major transactions arising from this secular influence on EMs’ growth and transformation of the global marketplace, government decisions, especially on will public procurement and privatization. face fundamental, enduring consequences. Needed: on-the-ground assessment of relationship dynamics between government and IFI/ donor actions that impact opportunities and risks.
Our service offerings: How PwC can helpThe interrelated set of services we Selecting Sound Partners by identifying andprovide to our clients is part of an evaluating 3rd parties, including agents, consortium members, distributors, acquisition targets, etc. anditerative business solution strategy and systematically assessing any hidden risks orimplementation model that spans the opportunities utilizing a Business Partner Selectionlifecycle of an investment or transaction. Toolkit. Optimizing Market Entry Location and Competitive Market Evaluation to assess current Logistics, by using a Location Decision-Making and prospective demand-supply gaps, potential Framework that assesses configurations of production competition from incumbents/new entrants, business and shipping costs taking into account cross-border involvement by the state, regulatory/antitrust threats, trade/investment incentives, as well as voice-of-the and availability of IFI/donor financing, captured in customer surveys, to decide whether to structure an traffic-light-coded MarketOpportunity Gameboards. investment on a regional/multi-country basis to 360o Weighted Stakeholder Analysis, maximize scale economies over what are otherwise illustrated in Stakeholder Business Success Maps stand-alone markets. (organized by market/ by sector) identifying and Development of Risk-Sharing Alliances to gauging the relative importance (both pro and con) of establish structures, such as B2B Partnerships, B2G local and other influencers to gain transparency, Agreements and Public Private Partnerships (PPPs) target key decision makers, and undertake early that define mutual benefits, work towards joint relationship-building to help align incentives. goals, and define creative ways of combining private Reputational and Market Due Diligence and public capital into the formation. Assessments to profile systematically risks and Anti-Corruption Compliance Assessment and opportunities associated with maintaining a sustained Remediation to promptly evaluate, manage and business presence, focusing on parameters such as: prevent exposure to fraud and corruption risks as political, corruption/governance, trade/investment companies expand their footprints into EMs. regimes, security, public perception, logistical arrangements, and access to and quality of infrastructure services. Iterative Strategy and Entry and expansion efforts further enhanced by continuous lessons Implementation Model learned derived from each new emerging market endeavor. Entry Expansion Exit Initial effort to evaluate and align with Efforts to maintain agility in operations, Determination to shift effort toward a new overall global strategy, on the basis preparing for prompt reaction to changes market, reallocate resources to a different of level of risk compared with span of in the market, and facilitating a model of business line or adjust to an alternate integrat ion opportunity on a portfolio basis. lean and optimized performance. strategy in another area of projected growth. Competitive Market Evaluation 360o Weighted Stakeholder Analysis Reputational and Market Due Diligence Assessments Selecting Sound Partners Optimizing Market Entry Location and Logistics Development of Risk-Sharing Alliances Anti-Corruption Compliance Assessment and Remediation
Why PwC’s emerging markets practice? PwC in North PwC in PwC in Central and America & the Western Europe Eastern Europe• We design and implement innovative business Carribean solutions over the entire investment lifecycle. 58,940 7,507 39,951• We have a granular, interdisciplinary understanding across a wide array of markets PwC in Asia world-wide, especially in EMs. 84,591• With a reputation for independence and integrity, our advice credibly pairs local development goals withcorporate objectives to engender win-win, profitable investments, and we can leverage IFI and donor financing. PwC in the Middle East and Africa• We implement locally, target regionally, and integrate globally: with a global footprint in 165 countries with 11,174 170,000 professionals, we help clients take full advantage of untapped and sometimes non- PwC in South and = Global Emerging Markets Center of Excellence PwC in Australia traditional market opportunities. Central America and Pacific Islands = Countries with PwC offices• We bring transparency to market conditions, 11,174 6,111 unmatched quality control, globally consistent practices, and a global network of business partners to help balance risk with performance.Sample deliverablesSample simplified PwC stakeholder mapLabor Unions Private Sector Trade Oil Company Hospital Medical Supplies Electric Law Firm ICT Labor Int’l Dev. InstitutionsGovernment World Bank Prime Minister USAID Deputy Prime Minister Key Client’s acquisition target Press Secretary Individual Adverse Individual Chief of Staff Union Firm / Institution Competitor China US Service Provider / Supplier Nat’l Industry & Healthcare Energy Port Resources Trade UAE UK Relationship Adverse Relationship Bilateral Investors Ministries Civil Defense Interior Finance Strength of Relationship
Sample deliverables (continued)Sample regional integration framework Sample business-partner matrix Market Market Market Business Business Business X Y Z partner X partner Y partner Z Strong regional hub Well connected and established locally X X 1 2 2 potential Positive reputation internationally X X Positive cross border Technical experience locally with track record X 2 5 4 dynamics/relationships Known for quality Ability to scale Definite interest in the market X 3 1 2 economies Long term vast experience for the role X X Ability to leverage Thought of for financial capacity and appetite to X Strengths Regional Economic 3 5 2 invest Communities Potential strategic partner beyond existing project X X Ability to leverage Limited on-the-ground organization X cross-border 2 4 5 Excessively aggressive trade agreements Regional Integration Factors Excessively risk adverse Infrastructure/market Protracted approval process X X 1 2 2 access across borders Relatively new entrant with no track record locally X Ability to leverage 5 3 5 Adverse Information identified X common currency Potential issue of capability since not known for Equal distribution X role Challenges of resources 4 2 3 Potential issues of capacity/committed globally X across borders Anticipated to be interested on own terms Availability of regional 5 1 2 Cultural differences to address X demand Targeted Role1= Poor 2 = Fair 3= Average 4 = Good 5 = StrongSample gameboard by country Ranking of market potential: = Low = Medium = High Government’s Stated Goals Energy: Health: Vscan Transport: Products Wind Turbines Locomotive 4-N Engines Government’s Stated Goals In Current Pipeline Should be in PipelineMarket Characteristics Financially Viable Financing Available Degree of Competition Regulatory Environment (taxes, property rights, pricing, etc.) Market Access (via infrastructure, etc.) Labor Market (access to skilled labor, strength of unions, etc.) Regional Play (linkages to other markets, ability to scale operations) Security/Political Environment General Business Environment (corruption, strength of interest groups, etc.) Additional Comments • Low wind speeds • Maternal health is • National rail • Limited a gov’t priority company is government • Product cost is expanding support a constraint regional routes