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Trouble
Spots
By Michael Alan Hamlin
December 30, 2003
Readers of the Far Eastern Economic
News know that the magazine published its Review 200 list in its
December 25, 2003 - January 1, 2004 issue. The Review, or FEER as
it is more fondly known, annually surveys its readership to come
up with Asia's version of Fortune magazine's most-admired companies.
All readers are given the chance to rank multinationals and regional
conglomerates. Country rankings are left to readers in each of 12
Asian countries in which the survey takes place.
The Review 200 is now in its 11th year. It began as an offshoot
of another program the magazine was involved in called The Asian
Management Awards. The Awards were the first region-wide awards
made to acknowledge excellence in management in Asia. The program,
which was conducted in cooperation with the Asian Institute of Management
(AIM) and run by TeamAsia, proved to be such a strong branding and
sales tool that the Review decided it wanted a recognition program
of its own, aside from the Awards.
The then-editor of the Review, Gordon Crovitz - who now runs Dow
Jones Newswires - consulted with AIM and TeamAsia in the development
of its program. The principle distinction from the Awards was that
readers choose the Review 200, while country panels of judges selected
the Awards. I use the past tense because The Awards died out a few
years ago due to differences between AIM and TeamAsia (or at least
that's my interpretation), but the Review 200 endures.
Throughout Asia, there's little variance from year-to-year in readers'
perceptions of the 12 countries' top companies, and that is certainly
the case for the Philippines. Jollibee is the perennial number one
company, with San Miguel and Ayala Corporation jockeying for the
number two and three slots. Globe Telecom and Smart Communications
- which each handle 100 million text messages a day - are four and
five, respectively, in this year's survey.
Bank of the Philippine Islands, Ayala Land, Mercury Drug, GMA Networks,
and ABS-CBN round out the top 10. It's notable that three of the
top 10 companies are Ayala firms, the holding company, its telecom
arm, and its bank.
There was some interesting movement in the ranking of multinational
corporations. Chief among them is the fall of BMW from the sixth
position to number 12. Toyota moved up from number five to three.
Toyota has had a remarkable year, and is on the cusp of becoming
the world's number one automobile manufacturer. BMW, on the other
hand, came off a remarkable two years of intense marketing communications
and the result seems clear: less visibility.
But one of the most interesting findings this year is a ranking
of the biggest threats to companies in 2004, something the Review
calls Trouble Spots. Number one on the list of threats is aggressive
competitors. In the aftermath of the 1997 financial crisis, Asia
has learned a lot about competition. Globalization has raised standards
of quality and service, while liberalization has greatly intensified
pressure to increase efficiency and productivity. The better companies
that result benefit consumers and shareholders.
Number two on the list is poor economic conditions in Asia Pacific
in general. The survey was taken before the latest blistering US
economic news was available, but the result also reflects continuing
anxiety over the prospect of a recurrence of SARS as well as the
impact of the War on Terrorism on tourism and many retail service
sectors. Interestingly, SARS seemed to benefit the Philippines in
some ways.
Garment manufacturers, for instance, tell me that many orders expected
to go to China's dominant manufacturers last year instead were placed
with Philippine manufacturers because buyers were afraid to travel
to China and Hong Kong. Buyers were frequently so happy with the
quality and timeliness of their Philippine suppliers that many of
them are likely to return to the Philippines next year, SARS or
no SARS. Incidentally, the number four worry is worry about some
unforeseen disaster (First it was the financial crisis, then the
war, then SARS, what's next?).
But it's the number four Trouble Spot that appears to me to be the
most strategic, and profound. It's finding and keeping talented
employees.
During the Internet Bubble, I often complained the developing countries
like the Philippines were subsidizing developed economies, especially
the U.S., but educating and then exporting their best minds. Post-Bubble,
although technology companies complain that they still need to import
the top minds from around the world, export of breathing intellectual
capital has declined.
But not the demand. Instead of importing the minds, U.S. companies
are just exporting the jobs. And in many respects, that's a great
thing. Unless you happen to be looking for the best and the brightest
yourself. Philippine companies still find themselves competing on
several fronts for smart people, and not just in terms of compensation
and benefits. Many of the brightest people want to work in sexy
industries, and won't consider sectors like garments, for example.
And they may prefer working in an IT or science park to commuting
to Makati.
When the Review presents the top Philippine companies in 2004, not
much may have changed at the top. But at least one other thing will
remain the same too: competition for the best people.
(Michael Alan Hamlin is the managing
director of consultancy TeamAsia and the author of three books on
Asian economies and companies. His latest book is Marketing Asian
Places, of which he is a co-author (Wiley, 2001), and he is currently
at work on High Visibility: The Making and Marketing of Asian Professionals
into Celebrities. Write him at mahamlin@teamasia.com.).
Copyright © 2003 Michael Alan
Hamlin. All Rights Reserved.
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