Here Be Dragons

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Here be dragons;
Anonymous. The Economist. London: Apr 17, 2010. Vol. 395, Iss. 8678; pg. 13 Abstract (Summary)
Most emerging countries have a penchant for highly diversified conglomerates. India's Tata Group, which accounts for almost 6% of the country's GDP, has subsidiaries in carmaking, agricultural chemicals, hotels, telecommunications and consulting. Reliance Industries' range sprawls from petrol products and clothes to fresh food. But such diversification is not confined to giant organisations. China is full of small and medium-sized companies that have fingers in many pies, taking advantage of opportunities as they arise. Many emerging countries also rely heavily on state-owned enterprises. These organisations are peculiar hybrids that have never been seen before; the closest relatives are the European trading companies of the 16th-19th centuries, such as Britain's East India Company. They are not old-fashioned nationalised companies run by the government and designed to control chunks of the national economy, but nor are they classic private-sector companies that sink or swim. Instead they are amphibious creatures that flit between sea and land, borrowing money from governments at subsidised rates one moment, plunging into the global market the next. Full Text (1500  words)|

(Copyright 2010 The Economist Newspaper Ltd. All rights reserved.) The emerging world is teeming with new business models
IN DECEMBER 1872 HMSChallenger sailed from Portsmouth to conduct the most ambitious survey of the oceans ever. During the ship's four-year journey the crew discovered over 4,000 unknown species and provided invaluable material for the raging debate about evolution. Business travellers in today's emerging markets often feel a bit like the Challenger's crew. They constantly come across what to Western eyes look like exotic corporate species and new, unfamiliar kinds of business which raise profound questions about the evolution of companies and business models. Most emerging countries have a penchant for highly diversified conglomerates. India's Tata Group, which accounts for almost 6% of the country's GDP, has subsidiaries in carmaking, agricultural chemicals, hotels, telecommunications and consulting. Reliance Industries' range sprawls from petrol products and clothes to fresh food. But such diversification is not confined to giant organisations. China is full of small and medium-sized companies that have fingers in many pies, taking advantage of opportunities as they arise. Many emerging countries also rely heavily on state-owned enterprises. These organisations are peculiar hybrids that have never been seen before; the closest relatives are the European trading companies of the 16th-19th centuries, such as Britain's East India Company. They are not old-fashioned nationalised companies run by the government and designed to control chunks of the national economy, but nor are they classic private-sector companies that sink or swim. Instead they are amphibious creatures that flit between sea and land, borrowing money from governments at subsidised rates one moment, plunging into the global market the next. China and Russia are the main exponents. Thousands of Chinese companies have convoluted ties to central or local government. Russia has created a large class of state companies that enjoy various legal privileges. But countries in Latin America and the Middle East are jumping onto the hybrid bandwagon. Hybrid organisations are particularly prominent in the energy sector. The world's 13 largest oil companies, as measured by reserves, are all controlled by governments, and three-quarters of the world's crude-oil reserves are in the hands of state-backed companies. Many of China's best high-tech companies, such as China Telecom and Lenovo, are also state-backed. But such organisations are active in lots of other areas too. Like the developing world's private giants, they are often diversified. Adapt and survive In...
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