Global Challengers, Innovation Styles and Complexity

What are the innovation strategies used by BCG’s Global Challengers?

BCG has recently published an updated list of Global Challengers, international companies from the BRICS which are showing healthy growth rates in incomes and employment. They have analysed new joiners’ strategies to market to highlight what approaches have driven them to this Global Challengers segment. They are articulated around three main strategies: “Capturing Middle-Class Consumers”, “Meeting Digital Needs” and “Supplying the world”. An underlying strategy which is common to all strategic groups is “Growing through acquisition”, with amounts that have reached $17.8 billion (America Movil) over the last five years. This analysis shows how market environment affects successful strategies and can be an ally for roll-out as most of those companies perform far better than long-established multinational competitors in times of financial crisis.

Many innovation thinkers like to link arts and innovation tools and methodologies. It is the case of following article from Innovation Excellence, in an attempt to describe Paul McCartney’s innovative style. As opposed to John Lennon, Paul McCartney tended to be an “adopter”, meaning he tended to re-use existing codes, musics, styles to create new songs, hence inventing closer to universes familiar to most people. On the other hand, John Lennon could be called an “innovator”, which means he’d break rules and established ideas to impose his, creating and inventing styles and songs that never existed before. These innovation styles can help managers and influencers identify the innovation style of the projects, teams, stakeholders, to better articulate their ideas and plans.

Innovation has yet to be seen in different angles, as the levels of issues it want to adress can vary from simple, complicated to complex. As this SSIR article explains, each of these problems requires a different strategy. Emergent strategy is highlighted as an adaptative plan that accepts “realised plans” which are affected by environmental changes unidentified in prior versions. Emergent strategies can handle complex types for issues (affected and affecting a whole system), when traditional strategies focus on simple and complicated problems.

WAI has analysed in below matrix the relationship between Global Challengers strategies, Innovation Styles and Complexity to understand what are the innovation key success factors of BCG Global Challengers.


Global Challengers and Innovation
Global Challengers and Innovation

Strategic comment: It’s not about destination, it’s about the pathway

The strategies used to “build and supply the world” have been driven by innovation rather than lower costs. Companies invest massively overseas (in Europe for the Indian Apollo Tyres), they come from industries existing Global Challengers already come. They also benefit from existing infrastructure and market positioning from mergers and acquisitions (Emirates Global Aluminium). EuroChem Mineral and Chemical from Russia plans to create a fertilizer plant in the U.S. and form a joint venture with Migao, a plant specialised in fertilizer based in China.

In order to “meet digital needs”, global challengers have had to create break-through innovation services that used just newly installed base of technology savvy consumers in their markets. This required the right knowledge, connections, infrastructure, cultural fit. It is creating new usage and developing communities, businesses. Tencent Holding’s roots are wholly online. They have created WeChat, a social messaging service, which now has 600 million users, 100 million of which are located outside China.

Capturing Middle-Class Consumers means learning to benefit from the growing middle class needs, both adapting to local habits and transforming them to introduce new brands, new usage. These companies include Concha y Toro, a wineyard trying to build a global brand with vineyards in Chile, US and Argentina, and Yildiz Holding, who leverage external growth overseas to gain shares in the packaged-food global markets.

Growth through acquisition is used by all groups. The most important example of this is Jollibee’s acquisition in China, making this country the largest foreign market of the company.

Operational comment: Draw the right card and get the right play


Market analysts and strategist should use this type of matrix to analyse the resources they have against the innovation complexity of the projects they’re driving. It can help them understand how they need to articulate messages, draw boundaries and limits to the feasibility, and/or hire the correct resources, grow their network with the right skills and profiles. A simple project will necessitate research and analyses skills to understand current trends and build on them, a complex project will require a mix of analyses and breakthrough thinking that will be able to generate creativity while communicating it with understandable codes.

Customers and Influencers
Customers and Influencers

Customers and influencers should understand where their needs fit in this matrix to better align their supplying strategy and investment policies. Complex needs will require long-term, high investments and partnerships to tackle, with an organisation and infrastructure that in able to support change and optimise benefits. They should expect set-backs and changes and encourage creativity to reach targets. Simple needs are low hanging fruits that need to be tackled right away using the right existing set of competences in the company.



C-Level and Leaders
C-Level and Leaders

C-level leaders can use this matrix to understand what are key company stakeholders positioning for their projects and how they need to develop their network and their knowledge to optimise results.




Innovation Experts
Innovation Experts

Innovation Experts are extremely interested in agile and emergent strategies, mixing personal skills and profiles, environmental impact and strategies, breakthrough innovation versus improvement. They can split the different theories they’ve come up with using this matrix to give an additional dimension to their analysis.


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