Both Western companies entering the emerging Asian markets and Asian companies going global should adopt tailored business strategies to win in local markets, a top McKinsey & Company manager said Monday.
Dominic Barton, global managing director of the U.S. management consulting firm, said this to Xinhua after he addressed the University of Edinburgh Business School on the theme of "Business in the Asian Century: Mega-trends and global champions."
Barton said the Asian markets mean profitable opportunities for Western companies in various sectors and some Western companies such as Coca Cola and Walmart have achieved great success in Asia despite different corporation cultures and systems.
"For Asian companies going global, they also need to adapt to local markets to make mergers," said the Canadian who once headed McKinsey's South Korean office and has been the company's Asia chairman based in Shanghai.
In his lecture, Barton said that the rise of emerging markets, resource scarcity, aging populations, the digital age and the market state are the five mega-trends reshaping the global economy.
"The economic center of gravity has come back to Asia," said Barton, noting that the Western management system can help in the process but needs transformation.
Massive urbanization in Asian and African countries, middle-class consumers, e-commerce have made emerging markets a profitable pool for more big world companies, he said, adding he is positive about the Chinese economy, which is undergoing a large-scale reform despite a slower GDP growth rate.
Somehow, Barton said, the scarcity of resources, aging population, ineffective pension systems, shortage of skilled workers, and sometimes disruptive technologies have constrained business expansion plans for companies.
Governments worldwide are also under increasing pressure and face unprecedented challenges, such as fiscal burdens, lower public support for free markets and trade, growing income inequality and lingering unemployment, he said.
Under such circumstances, the life span of companies, particularly the Western ones, has declined dramatically over time, Barton said.
In contrast, thanks to technological innovation and rising R&D spending, some Asian enterprises, such as Samsung, are doubling their growth rate compared with their Western counterparts, he noted.
The senior consulting manager suggested that companies reallocate resources more effectively, increase inner promotion mobility and develop a more flexible business model.