Profitable Growth: Avoiding the 'Growth Fetish' in Emerging Markets
Growth management is a challenging but critical corporate strategy facing the fast economic growth in emerging markets. According to the new research of the Institute of the Emerging Markets Studies, an overemphasis on growth would lead to the growth fetish, where growth is unqualified and seen as an end in itself. By examining the performance of 105,260 firms in key sectors in Brazil, Russia, India, and China from 2002 to 2011, Senior Research Fellow Dr. Nan Zhou presents quantitative evidences that support a profit-oriented strategy as a more effective path to sustained profitable growth in emerging markets.
To further support this argument, this briefing also provides qualitative evidence of a group of 70 sustained high-performing firms that are superior to their peers; i.e., the top 500 private companies in each of the BRIC countries, in terms of profit, growth, market share and efficiency over a ten-year period. The briefing shows sustained profitable growth requires qualified sales growth (i.e., organic growth), competence-based and competence-enhancing growth, and continuous product diversification.