{ "docId": "019dd923-5ca1-7489-b634-df215e4f0bc1", "docSlug": "b89c4b2a8f5b0c45", "documentTitle": "Transformation Ebook", "authorId": "BCG", "authorName": "BCG", "documentKindSlug": "consulting-deck", "documentKindLabel": "Consulting deck", "sourceTypeSlug": "strategy_consulting", "sourceTypeLabel": "Strategy consulting", "presentationDate": null, "orientation": "landscape", "aspectRatio": 2.5, "pageNumber": 150, "pageCount": 167, "prevPage": 149, "nextPage": 151, "slideType": "situation_overview", "function": "establish_context", "density": "overcrowded", "nDataPoints": 3, "notes": "Page 142 from a BCG publication.", "elementsJson": [ "paragraph", "footnote" ], "metadataConfidence": 0.9, "imagePath": null, "slideHref": "/slides/019dd923-5ca1-7489-b634-df215e4f0bc1/150", "deckHref": "/decks/019dd923-5ca1-7489-b634-df215e4f0bc1", "deckJsonHref": "/decks/019dd923-5ca1-7489-b634-df215e4f0bc1.json", "deckAnchorHref": "/decks/019dd923-5ca1-7489-b634-df215e4f0bc1#slide-150", "components": [ { "bbox": null, "kind": "callout", "text": "These companies have often found that their costs of goods sold are at least 20% higher than those of their principal local competitors because of product design and material costs.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd951-9f62-7003-b128-2607a695675c", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "metric", "text": "local competitor cost advantage: 20%", "attrs": null, "subkind": "primary", "toolName": "Quantification", "toolSlug": "quantification", "confidence": null, "componentId": "019dd951-9f62-7003-b128-28c74de17914", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.1, "w": 0.8, "x": 0.1, "y": 0.85 }, "kind": "paragraph", "text": "Leading companies are now applying a much sharper definition to targeted segments in order to assess products' cost-effectiveness. They are systematically using target costing to further ensure competitiveness, often setting targets of 30% to 50% less than that of the previous product. And they are rethinking how they can adapt offerings from one emerging market to others and thus gain scale advantages.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "1c942a60-7c23-47ff-89a4-235b2ef883d0", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.2, "w": 0.8, "x": 0.1, "y": 0.23 }, "kind": "paragraph", "text": "The biggest difference between past and future assessments needs to be a more radical examination of the actual competitiveness of the MNC's local operation in each market and segment. The best companies will know exactly how big the cost differentials are between their operations and those of their strongest local competitors. They will develop a systematic approach to gaining local competitive intelligence, regularly analyze their competitors' offerings (often by reverse engineering them), and assess the strategic and operational gaps.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "72891334-f274-455b-bcd8-cd4d0c1b5ac5", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.25, "w": 0.8, "x": 0.1, "y": 0.44 }, "kind": "paragraph", "text": "For example, some MNCs undertake regular market-by-market analyses of their economics versus those of their local competitors in order to truly understand where their own advantages—and disadvantages—lie. (See Exhibit 1.) These companies have often found that their costs of goods sold are at least 20% higher than those of their principal local competitors because of product design and material costs. Their compensation costs are also higher because higher labor productivity only partially offsets higher pay packages. The companies use these insights as the basis for restructuring their local activities to address competitive weaknesses.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "88a1e54b-a59a-4d98-aa39-efe76cc54bde", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.8, "x": 0.1, "y": 0.7 }, "kind": "paragraph", "text": "Another manifestation of this shift will be developing new ways to think about portfolio management. Many companies have developed a broad portfolio of offerings in emerging markets, often with individual products tailored for individual countries. These products lack the scale necessary to make a significant contribution to global results. This approach has been a big driver of growth, but a tougher outlook now requires a different kind of product portfolio management.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "9c489ff9-58d1-4a5a-8348-fe96c73b2736", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.8, "x": 0.1, "y": 0.08 }, "kind": "paragraph", "text": "More and more, companies are asking such questions as, What is the investment risk in each of our markets? Which customer segments can we serve competitively? Do we have product segments in which slowing growth and declining profitability may threaten the viability of a business unit?", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "e2652ba4-2b8f-4c84-adfa-e9d16de8ffb4", "frameworkName": null, "frameworkSlug": null } ], "metrics": [ { "metricRaw": "local competitor cost advantage", "numberRaw": "20%", "numberKind": "percent", "actionTitle": null, "calloutText": "These companies have often found that their costs of goods sold are at least 20% higher than those of their principal local competitors because of product design and material costs.", "numberScale": null, "numberValue": 20, "metricFamily": "cost_savings", "numberCurrency": null } ], "tools": [ { "name": "Audience Definition", "slug": "audience-definition", "agent": "Storyteller", "layer": "slide", "matchId": "b20c4bdc-5acd-4657-956a-11fbc720003a", "evidence": "The slide mentions 'companies are asking such questions as, What is the investment risk in each of our markets?' indicating an understanding of the audience's concerns.", "confidence": 0.6 }, { "name": "Concrete Language", "slug": "concrete-language", "agent": "Storyteller", "layer": "slide", "matchId": "019dd95a-1575-7358-9708-e5304d3ac397", "evidence": "MNC COGS at least 20% higher than local competitors.", "confidence": 80 } ], "frameworks": [], "arcBeats": [ { "to": 159, "from": 121, "beatId": "019dd95a-0702-74a3-87e2-aa2e1a632130", "arcName": "The Consultant's Gambit", "arcSlug": "consultants-gambit", "beatName": "Impact & Next Steps", "beatSlug": "consultants-gambit-impact-next-steps", "evidence": "Part III applies framework to digital, turnaround, emerging-market contexts.", "position": 5, "confidence": 85, "parentBeatName": "Resolution", "parentBeatSlug": "resolution" }, { "to": 159, "from": 121, "beatId": "019dd95a-0702-74a3-87e2-b6be36bae024", "arcName": "The Triple Take", "arcSlug": "triple-take", "beatName": "The Action (Now What)", "beatSlug": "triple-take-the-action-now-what", "evidence": "Part III - distinctive transformation types and how to apply.", "position": 3, "confidence": 65, "parentBeatName": "Resolution", "parentBeatSlug": "resolution" } ], "loops": [ { "to": 158, "from": 147, "name": "Tale Two Worlds", "slug": "04-tale-two-worlds", "bestFor": "Competitive analysis, benchmarking, case for change", "matchId": "019dd95a-088c-724c-b30e-e75b0a4ffa63", "evidence": "Chapter repeatedly contrasts MNC selling expense (45%) vs local (10%), 20%+ COGS gap; calls for multilocal shift.", "position": 12, "objective": "Contrast MNC approach vs local-competitor reality in emerging markets", "structure": "Current State -> Desired State / Benchmark -> The Gap & Implication", "confidence": 75, "description": "Show the gap between two states to drive urgency or highlight opportunity" } ], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }