By TEH SHI NING

COMPANIES with international ambitions need strategies that reach beyond expanding sales and shifting production offshore to keep up with competitors in rapidly developing China and India, says the Boston Consulting Group (BCG).

'It is no longer enough to take the home-country business model into rapidly developing markets, and to target customers in premium segments and the main cities,' said Singapore-based BCG senior partner Bernd Waltermann. Western companies, in particular, will need to become more like the 'brash upstarts' from fast-growing economies to ensure their continued global success.

Mr Waltermann, one of the BCG report's authors, thinks that companies seeking global influence need to target fresh markets and market segments, gain access to resources in rapidly developing economies, adapt to local customers' needs and integrate operations to reap the benefits of a global network.

In competing for resources for instance, the report says Chinese companies have been more aggressive than their peers in securing access to commodities during the recent economic crisis.

Examples cited were Chinalco's US$15 billion attempt to buy Rio Tinto, PetroChina's US$1.7 billion investment in Canadian oil sands and CNOOC's bid for a sixth of Nigeria's oil reserves.

Older models of incremental global expansion typically try to replicate an existing business abroad - looking at a segment of the Latin American market similar to its own or shifting production to China to save costs - but this may no longer suffice.

Businesses are drawn to the rapidly growing economies, which increasingly differ from developed ones in the heterogeneity of each market.

The management consultant thus advocates a philosophy of 'manyness' and thinks companies should develop varied products and services and draw on varied skills, talents and systems to compete internationally.

In this respect, businesses born in a culture of 'manyness' in fast-growing economies have an edge. In fact, some have used this to enter developed markets.

Tata Chemicals' three centres in India, UK and US each hold local and global responsibility, which some might see as problematic. But Tata Chemicals thinks that ownership at the local level helps retain top talent and yields more effective decision-making, the BCG report said.

'While local entrepreneurialism is indispensable, it is the network that allows any results to be shared and diffused around the world,' the report adds, stressing the need for good management of global networks to ensure 'that the whole is greater than the sum of the parts'.

This article was first published in The Business Times.