By 2010, the world's consumption should be at roughly $41.2 trillion. From the perspective of purchasing power parity, the U.S. and Canada will represent $9.7 trillion, Europe and Russia $9.1 trillion, while Asia will balloon to $15.7 trillion. Africa will move to $3.3 trillion and South America will settle in at $3.4 trillion.
"Collectively, Asia will have huge purchasing power," said Hepburn. At the individual level, it will be a challenge for companies like Unilever to provide products that consumers in these countries can afford. Hepburn mentioned the success that Unilever has had in emerging markets by tailoring existing products sold in other Unilever markets. The example used was innovative packaging for the introduction of single serve shampoo and conditioning products into the Indian market.
The developing world is not the only place Rodrigues sees growth opportunity. In the developed world - where he expects consumer spending to remain constant, a moderate increase in consumer indebtedness, and a continued preference for electronic payment over cash and check - Visa is moving into new markets. They include small transactions, repeat payments, healthcare, and the purchasing arena of business and government. In the UK, for example, the Visa Government Purchasing Card allows the government to streamline its purchasing processes. KPMG estimates that each transaction made via GPC saves taxpayers 70 percent in process costs.
For Visa, the challenge of global expansion has been finding new ways to apply its original vision. Its founder, Dee Hock, believed that giving the average consumer broader access to capital would have a real and positive impact on the economy and society. Rodrigues, who has been CEO only since March 2004, agrees with this vision. Might there come a point when he feels that Visa has exhausted all of its opportunities for expansion? Perhaps when Club Med switches from shells to cards, he joked, he'll be able to take a breather.
Calibrating One's Hold on the Corporate Reins
The conference also included a panel on the challenges of growing a global business. Participants noted that leaders in charge of these businesses must decide, for example, how tightly to hold on to the corporate reins: Pull too hard and you stunt the entrepreneurial activities that emerge at the local level; let go and you risk losing control of your corporate brand and values. Speakers from both the corporate and academic sides agreed that the only constant in managing a global corporation is the ongoing calibration process required to balance corporate and local needs.
Most global firms grow through mergers and acquisitions, which means that bringing companies into the fold and deciding how tightly to control them is a critical decision point. Such was the case for AXA. In just 30 years, the insurance and financial protection company has grown to €71.6 billion - about $89 billion - in annual revenues. The company has 50 million customers in more than 45 countries and 117,000 employees worldwide.
With much of its growth achieved through mergers and acquisitions, AXA faced a critical question early in its development: Do we want to be a centralized or decentralized company? The benefit of the former, said Claude Brunet, a member of the management board, is that "you can have one thing everywhere;" the latter frees up a company "to be entrepreneurial, to respond quickly to new market challenges and opportunities." Instead of compromising, AXA chose to have its cake and eat it too, selecting what they call an "everything decentralized but" strategy.
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