From Tiger Cub to Siamese Cat to What?
A Critique on “The tigers that lost their roar”, The Economist, March 2008 Benjamin Peter C. Puzon, MBA 2011
China and India have been in the global economic limelight since Jim O’Neill in 2001 coined the term BRIC (Brazil, Russia, India and China) in the seminal article, Building Better Global Economic BRICs. Before 2001, the world was focused on a different set of Asian countries: the Four Asian Tigers (Singapore, Taiwan, South Korea and Hong Kong), as well as the Four South-East Asian Tiger Cubs (Indonesia, Malaysia, the Philippines, and Thailand).
The 2008 article from The Economist tackled these Tiger Cubs, as well as Singapore. South-East Asia was badly hit during the Asian financial crisis of 1997-1998, and recently these countries posted strong growth. The article points out that these five countries – Singapore, Indonesia, Malaysia, the Philippines, and Thailand – have yet to showcase world-class companies that would put them back on the path to high recognition in global economy. Japan, South Korea, China, and India have produced globally recognized brands – Toyota, Samsung, Lenovo, and Tata Steel to name a few. Interbrand’s Best Global Brands in 2010 featured Japanese and Korean heavyweights on the top 100 list: Toyota (#11), Samsung (#19), Honda (#20), Canon (#33), Sony (#34), Nintendo (#38), Hyundai (#65), and Panasonic (#73). The Asian brands comprise only 9% of the list, and it did not feature a single Chinese or Indian brand, much more a South-East Asian brand. The Economist article noted that if there’s one globally recognized South-East Asian brand, it would likely be Singapore Airlines. The article cited a book written by Joe Studwell which argues that the failure of South-East Asian businesses in the global scene is explained by the fact that most of the large corporations in the region are “old-fashioned and mediocre… run at the whims of ageing patriarchal owners.” Most of these conglomerates rely on ties with government officials who award them with generous state contracts and concessions, turning competition into a near-monopoly. Because such companies acquire technology if they need it, there is no indigenous, large-scale companies that produce world-class products and services. In contrast, the companies cited on the rankings above have escaped this state of mediocrity. The article also claimed that much of the region’s high-value exports are made by foreign companies, who can always close shop in these countries and move to China where costs are lower and the home market is remarkably bigger. There’s also very few companies that tried to go beyond their home markets. The article noted that in 2008, China had 41 companies in the 100 Global Challengers, and India had 20, while South-East Asia only had five – Indofood Sukses Makmur, Malaysia International Shipping Co., Petronas, Charoen Pokphand Foods, and Thai Union Frozen Products. The 2011 Global Challengers list, meanwhile, featured less Chinese companies (33) and the same number of Indian companies (20). South-East Asia welcomed three additions: Bumi Resources (a coal company in Indonesia), Indorama Ventures (a polyethylene terephthalate or PET producer in Thailand) and PTT (a state-owned oil and gas company in Thailand). Malaysia International Shipping Co., which was on the 2008 list, was not present in the 2011 version. BCG explained that the companies that are no longer on the list were taken out because either they are not expanding globally as aggressively as the currently listed companies are, or they were hit by the global financial crisis and are now focusing more on bringing their companies back to health. The Economist article suggested that if a firm wants to be counted as world-class, it needs more than just sheer size and managerial prowess. It has to have one of three critical factors: a globally valued brand, its own cutting-edge technology, or a genuinely innovative and admired...
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