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9 Cards in this Set
- Front
- Back
Developing Countries |
BRICS - thought to be leading economies in 2050 (Brazil, Russia, India, China, South Africa) MINT - also identified as emerging economic giants (Mexico, Indonesia, Nigeria, Turkey) N11 - next 11 largish economies (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, the Philippines, South Korea, Turkey, Vietnam) CIVETS - large and stable (Columbia, Indonesia, Vietnam, Egypt, Turkey, South Africa Large number of countries which are growing - began to see trade in these developing economies outstripping trade in traditionally big economies - previously the West got more aggressive at taking raw materials from around the world but carried on producing/exporting - recent globalisation about more and more countries having access to manufacturing (low cost labour, availability of raw materials) Emerging markets remain the world's growth engines - between 2010-2020 over 2/3 the anticipated growth in consumer spending ($11 trillion) will originate in emerging markets |
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Trade Tipping Point |
In 2013 the GDP of emerging markets exceeded advanced markets for the first time (in Purchasing Power Parity terms) 2:1 rule - if world trade keeps growing, GDP keeps growing The binary view of the world economy is outdated - not so clear cut between developed/undeveloped - Colombia/Poland have little/less in common with other so-called emerging countries e.g. Bangladesh/Kenya than they do with Germany/US Companies need to move beyond old labels and find new ways to set market priorities Rebalancing of economy with less trade & intratrade in Asia around silk road Traditionally made in China and shipped to USA - 2 year cycle - needs to be shortened for companies e.g. Nike to be successful and meet a society of instant gratification e.g. Burberry now allowing you to buy from catwalk Setting up supply lines a year ahead is wasteful - have to estimate what consumers will buy - Zara make more locally and respond faster - cost of manufacturing in China become more expensive so people re-thinking supply chains |
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World Economic Forum Predictions for the Modern World |
All products will have become services - products and services becoming more and more intertwined There is a global price on carbon - polluters will have to pay to emit carbon dioxide - although Trump changing American equation US dominance is over - we have a handful of global powers e.g. India/China The values that built the west will have been tested to breaking point - questioning of America's uncompromising pushing of values out to the world |
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10 Global Macro Trends for the Next 5 Years |
An uncertain future - currency volatility (pound,euro,dollar,yen etc) Emerging middle classes Disaffected youth - terrorism/political problems stemming from a big group of under 30 with no jobs Rich/poor divide Climate challenge - only since 1970 US companies have begun to clean up after themselves Ageing world - improvements in medicine & 1960s effective contraception = sex more recreational than procreational Urban transition - we move into cities and birth rates decline - expensive and no need for large families to run farms People on the move - internal migration in China/other parts - from south to north A more connected world China goes global - silk road plans that are moving very fast |
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PWC Megatrends |
Implications can be very short-term, even if a mega-trend: Demographic and social change Shift in global economic power Rapid urbanisation Climate change and resource scarcity Technological breakthrough |
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Customers |
Urbanisation Over 50% world's population live in cities - expected to reach 70% by 2050 - cities undergoing unprecedented change and urbanism is one of the most crucial issues of our time Urbanisation written into current 5 year plan of China to help grow GDP - raise urbanisation from 50 to 60 as fast as possible - big implications for transport/climate/waste disposal etc. Shifting Demographics Number of working-age Chinese shrank by 3.45m last year - big turning point - workforce is declining More older people in China than whole population of Japan - China has to get very rich very fast before it gets old - lacks saving to pay for medical/retirement issues - if you need cheap labour then Vietnam/Nigeria etc. more into focus - China now biggest user of robots in world - maintaining capacity through replacing labour with robotics Reducing poverty 1 billion people have been taken out of poverty since 1990 - the great success of globalisation More and more people going from poverty to middle-class - especially in Asia - by 2020 middle class in Asia will be 1.7 billion: - much younger - decide the value of our products - decide whether everyone in the supply chain gets a fair living - the price they pay decides whether the environmental issues can be managed - opinions they hold about the planet will be more enduring than legislation - they know how to be heard Growth India growing substantially, China plateauing, USA continuing to grow, places like Pakistan/Nigeria also growing quickly Total population rising as we live longer |
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Emerging |
Emerging brands from all over are catering to emerging middle classes from all over Traditionally emerging companies exported to west - markets now saturated - Chinese/Brazilian brands selling to the middle classes in Turkey/India Not just individual country culture - wanting to by-pass some elements of Western capitalism, banking and democratic 'arrogance' Many newly empowered consumers see rampant materialism as unsatisfactory/selfish when society remains rife with insecurity/inequality E.g. Amazonas Sandals - Brazilian flip flops in China E.g. Lenovo - purely Asian smartphone strategy E.g. BluePad - low cost Colombian tablet available throughout Latin America |
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Cultural Commerce |
Asian consumers never had higher expectations - brands across Asia producing ever more best in class offerings - thirst for offerings tailored to their needs by regional brands who really understand them - set to grow spectacularly Innovation in Asia, by Asia, set for rapid growth E.g. LG - India's most trusted consumer durable brand - pursued a dedicated micro-localisation strategy since 2010 - better at identifying local needs than western brands Eg. Tsingtao - 'made for Chengdu' adaptation - adapted its beer bottle for Chengdu consumers - larger allowing for beer to be poured into small cups and shared with food, mimicking the traditional way baijiu is communally drunk |
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Time Zone Trading |
The end of automatically sourcing from Asia, or just for low cost Total re-think of world trade/locations e.g. supply chain E.g. Amazon investing in psychological analysis to anticipate demand - revolutionising distribution E.g. Zara - majority made in Spain or just outside Spain - shorter lead time - flexibility based on demand |