The financial crisis has significantly impacted global challenger companies, much like it has affected other businesses worldwide. Despite the challenges, these companies are not only surviving but also adapting to the New global landscape. They are actively reshaping their business portfolios and striving to maintain or even increase their influence in the post-crisis world.
The ongoing financial turmoil has deeply influenced economies, industries, and corporations across the globe. Many firms in emerging markets—some of which were among the 2009 BCG100 Global Challengers—have felt the pressure. Even before the crisis, these top-performing companies had already emerged as formidable international competitors, leveraging their strengths from rapidly developing economies to expand aggressively and deliver strong shareholder returns.
But how has this crisis affected their growth trajectory? Companies from China and India, with robust economic growth and substantial government stimulus, contrast sharply with those from developed nations facing stagnant economies. The impact varies widely across regions and sectors, raising critical questions for multinational corporations about how to prepare for the evolving role of these challengers in the post-crisis era.
The crisis has had a mixed effect on both established firms and challengers. On the negative side, declining global demand, rising capital costs, and shrinking stock valuations have posed significant challenges. However, there are also positive outcomes: governments have introduced stimulus packages, and cost-conscious consumers are increasingly drawn to affordable products and services offered by some of these challengers. Additionally, falling commodity prices benefit buyers but hurt sellers, while currency fluctuations can be both an advantage and a risk.
Global demand has been in decline, affecting all types of businesses. According to Goldman Sachs’ July and August 2009 Global Economic Analysis, advanced economies saw a 14.4% drop in imports in 2009 compared to 2008, consumer spending fell by 0.9%, and domestic fixed investment declined by 14.1%. This has led to sharp export declines from fast-growing economies, further straining global trade.
Rising capital costs have also constrained both challengers and traditional companies. Although governments injected liquidity into the market, financial risk premiums and borrowing costs remained high for months after the crisis. This made it difficult for companies to raise capital through stock issuance, especially when stock prices dropped sharply and public listings became less attractive.
On the positive side, many governments launched stimulus programs aimed at boosting economic recovery. These initiatives helped improve liquidity, stimulate domestic demand, and restore consumer confidence. For challengers, such policies not only helped them weather the storm but also positioned them more strongly in the post-crisis market.
Moreover, consumers are becoming more cost-sensitive, shifting toward cheaper alternatives. Some challengers and established firms have already benefited from this trend. Meanwhile, the difficulties faced by high-cost market companies have created opportunities for low-cost suppliers from fast-growing economies. We expect these local players to gain more market share in global exports in 2009.
Currency fluctuations have also played a key role. While most fast-growing economies saw their currencies weaken against the dollar, the RMB remained relatively stable. The Russian ruble lost nearly a third of its value, and the Indian rupee depreciated by about 10%. These changes have reshaped the competitive dynamics among fast-growing economies and influenced the attractiveness of different export markets.
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