1、Navigating Business Building in Asia:Insights and TrendsBy Hanno Stegmann,Aarish Netarwala,and Abby ZhangMarch 20242Key Takeaways Section 1:The state of business building in APAC1.Introduction2.Priority of business building for growth3.Success and struggles in APAC 4.M&A as a business-building vehic

2、le Section 2:Key areas of improvement required1.APAC business building must focus on nine strategic assets2.Missing Pieces:Specialized talent and culture of innovationSection 3:Three pillars of business building in APAC1.Develop a robust talent strategy 2.Implement rigor in your business-building me

3、thodology3.Foster a culture of innovationConclusion:Capturing value in APACs thriving growth landscape4678911 021 22Table of Contents3Appendix1.About BCGX2.Link to BCG X global report:How Companies Can Speed Up the Business of Business Building3.About the Authors4.Key Contributors5.Acknow

4、ledgements2323 232425254Key takeawaysExhibit 1-9 Strategic Assets that Enable Breakout Business BuildingCore Assets1.Brand2.Financial position3.Sales and distribution7.Technology8.Data9.Intellectual property Org.and Collaborative StrengthTech Capabilities4.Talent6.Strategic partnerships5.Culture of

5、innovationAsia Pacific(APAC)is a dynamic and diverse region with world-leading growth potential.The region is projected to account for 60%of global GDP growth in 2024,despite recent global economic uncertainty.Large corporations seeking to capitalize on this opportunity should look to create busines

6、s-building engine capabilities that are able to deliver consistent results.This imperative will enable large corporations to accelerate growth dramatically.Business building involves finding new growth potential in existing capabilitiesbecoming,in effect,a continuous business-building company.High-g

7、rowth activities include new go-to-market efforts,acquisitions,and the set up of entirely new subsidiary companies.Nine strategic assetsshared across three categories of Core Assets,Organizational and Collaborative Strength,and Technology capabilitiesenable breakout business building.Exhibit 1.The m

8、ost critical asset,and most lacking in the region,is access and availability of specialized talent needed to pursue such dynamic,entrepreneurial efforts.Our recommendation to corporate leaders in APAC is to capitalize on this significant growth opportunity through three key levers:Create a culture o

9、f innovation to attract and retain world-class innovation talent Develop a robust business-building methodology Use mergers and acquisitions to strengthen current strategic assets5The state of business building in APACSection 16Section 11Introduction2Priority of Business Building for Growth4M&A as a

10、 Business-Building Vehicle3Success and Struggles in APAC 7Introduction1Over the past decade,APAC corporations have strategically prioritized the enhancement of digital proficiencies,which has primarily focused on bolstering core operations.As this process progressed,these companies have not only ado

11、pted more operational methodologies such as agile ways of working but have also integrated innovative digital roles and fostered multidisciplinary teams with positions such as data scientists,product designers and software engineers.Thanks to the accumulation of these capabilities,we see many of our

12、 clients now expressing an ambition to venture beyond their core operations.They are keen to explore both adjacent sectors,as well as entirely new markets.In order to realize this ambition,companies are adopting a business building approach.This comprehensive strategy encompasses the invention,initi

13、ation and expansion of fresh product and service lines.We have already seen some prominent examples here in the APAC ecosystem.Grab,Southeast Asias on-demand ride hailing and delivery giant,has expanded into the financial services sector with digital payment solutions,lending and insurance services.

14、With its dynamic business landscape,APAC is poised to embark on a transformative economic journey over the next five years.Businesses need to build their capabilities to consistently pursue high-growth opportunities as a critical success factor if they are to capitalize on the growing value in this

15、landscape.Were seeing more and more clients in APAC with the ambition to venture beyond their core business and capture new tech-driven growth opportunities as the regions economy grows”Romain de Laubier,Managing Director and Senior Partner,Asia Pacific Regional Chair,BCG XIn order to understand the

16、 priorities and preparations of business leaders in APAC,BCG X surveyed over 400 senior leaders across the region about their business-building efforts.This included engagement with leaders in China,India,Japan,Australia and Singapore.APAC leaders were open in sharing where business building sat on

17、their list of priorities,the successes and struggles their companies have faced in the journey so far,and their short-term approach to expansion.We explore those topics in detail throughout this report.8Priority of business building for growth2A significant 80%of executives surveyed say business bui

18、lding is a major priority for their organization.Of the 80%of companies prioritizing business building,they have pursued,on average,five new high-growth opportunities each year since 2021.Perhaps unsurprisingly,APAC is the region with the greatest reinvestment of revenue into high-growth opportuniti

19、es globally.Exhibit 2.Almost one-third(32%)of annual revenue of APAC companies captured in our survey is reinvested into launching,acquiring or co-launching startup venturesnotably higher than the 27%global average.This reflects the encouraging regional optimism about future growth opportunities.Exh

20、ibit 2-APAC is the Region with the Greatest Reinvestment of Revenue into High-growth Opportunities%of revenue invested in high-growth opportunitiesSelf-funded new business buildAcquisition&accelerationof existing startupJointventureCorporateallianceCorporateventurecapital32%37%22%15%15%11%9Success a

21、nd struggles in APAC3Almost all APAC leaders(98%)say their business-building efforts are successful,at least in part.Exhibit 3.Yet a closer look at the survey reveals a gap between individual efforts and sustained viabilitywith 40%of leaders stating their companies are not well-prepared for pursuing

22、 new high-growth opportunities.This represents a sizeable gap between the success of prior business-building efforts,against the confidence to undertake these activities again.Leaders that engaged with our survey attribute business-building success to pivoting business models or acquiring companies

23、outright to expand.For example,in India,fast-moving consumer goods(FMCG)giant Godrej acquired the consumer-care arm of fashion conglomerate Raymond in a deal valued at US$340 million.This can be contrasted against the two most cited reasons for failure in business buildinglack of a viable business m

24、odel and product market fit.Both failures stem from a lack of rigor in business-building methodology in efforts to properly vet business models and product market upfront,prior to heavy investment.Exhibit 3-98%of Leaders Claim Success in Business Building,Yet 41%Also Acknowledge FailuresCharacteriza

25、tion of business building effortsSuccessfulBoth Successful and Unsuccessful Unsuccessful57%41%2%10These findings indicate companies are succeeding with businesses which are established and running,but still struggle with building new business lines from the ground up.Exhibit 4.Exhibit 4-Companies ar

26、e Succeeding with Businesses Which are up and Running While They Still Struggle with Building New Business Lines from the Ground Up 0%5%10%15%20%25%30%35%BusinessModelPivotSuccessfulM&AAdditionalSynergiesBusiness ModelNot ViablePoorProduct/MarketFitInsufficientFundingTop 3 reasons for successTop 3 r

27、easons for failure30%25%15%30%17%14%110%10%20%30%40%50%60%70%80%Met growth ambitiousDid not meet growth ambitiousSuperseededgrowth ambitiousSignificantloss incurredMuch more important than beforeNo changeMuch less important than beforeSomewhat more important than beforeSomewhat less important than b

28、eforeImportance of M&A as a business-buildingstrategy over the past two yearsLevels of Satisfaction with M&A15%4%49%11%21%69%16%9%6%M&A as a business-building vehicle4While self-funded business build remains the dominant vehicle to pursue high-growth opportunities,mergers and acquisitions(M&A)are se

29、eing renewed focus as a growth vehicle in APAC.Almost two-thirds(65%)of APAC leaders believe there is now higher focus on M&A than in the previous year within their organizations.In markets like today,M&A can complement your business-building strategy.There are a number of attractive assets on the m

30、arket at fair valuations as multiples have come down.”Hanno Stegmann,Managing Director and Partner,Head of X Ventures Southeast Asia,BCG XThe mood music around M&A is also positive,with 77%of leaders satisfied with their organizations M&A effortsa growth strategy rising in prominence as a result of

31、broader economic slowdown.The economic headwinds mean many M&A targets find themselves in challenging positions due to failing cash reserves,and with significant cuts to valuations.These economic dynamics create fertile ground for a strong M&A ecosystem.Exhibit 5.There is currently a unique window o

32、f opportunity for businesses to acquire and accelerate underperforming assets.However,it is important not to over-index on this singular vehicle as a growth strategy.As market dynamics shift,we anticipate a resurgence of premium valuations,narrowing M&A opportunities and their associated returns.Exh

33、ibit 5-M&A is Growing as a Business-Building Strategy Over the Past Two Years12Key Areas of Improvement RequiredSection 213Section 21APAC business building must focus on nine strategic assets2Missing Pieces:Specialized talent and culture of innovation14Apac business building must focus on nine strat

34、egic assets1There are nine strategic assets which leaders in APAC should focus on,split across three distinct categoriesCore Assets,Organizational and Collaborative Strength,and Technology Capabilities.A companys strategic assets are key elements of business building that enable a launch to break th

35、rough.Based on our own experience at BCG X of launching more than 200 builds,we have identified the following nine strategic assets as the most critically important.Core Assets1.Brand.A strong brand is crucial for gaining customer trust and standing out in the market.2.Financial position.Healthy cas

36、h flow and robust financial position enables a company to sustain operations in growth areas.3.Sales and distribution.Access to sales and distribution networks enables an organization to efficiently reach customers faster than fresh startups.Organizational and Collaborative Strength4.Talent.Skilled

37、and experienced individuals are essential to execute innovation.5.Culture of innovation.Culture should underpin an environment that encourages the pursuit of new ideas without the fear of failure.6.Strategic partnerships.Collaborations with other companies,universities,community groups and governmen

38、t agencies can provide additional resources,capabilities and/or market access.Technology Capabilities 7.Technology.The requisite technology and necessary technical tools and systems must be in place to deliver products and services.8.Data.Data drawn from inside and outside the company should underpi

39、n informed decision-making.9.Intellectual property.Intellectual property(IP),including patents,trade secrets and methodologies are fundamental to provide competitive advantage.15Our survey reveals that 71%of respondents have five or fewer of these strategic assets available,and only 4%of companies c

40、laim access to all of them.Exhibit 6.The assets revealed as most frequently lacking are(1)Intellectual property,(2)Sales and distribution networks,(3)Brand,and(4)Data which can be leveraged.Organizations that invest in new venture growth will see limited returns and a slower path to scale if they ar

41、e unable to effectively leverage the assets they already have.”Kevin Lucas,Managing Director and Partner,BCG X SydneyExhibit 6-Out of Nine Strategic Assets,Most Companies Claim Five or FewerNumber of Strategic Assets Available for Business Building and Growth123456789%of Companies05%6%18%

42、29%16%14%7%4%5%16Missing Pieces:Specialized talent and culture of innovation2Our survey reveals the majority of companies claim to have the right talent,but three-quarters(76%)of companies are reassigning talent internally to build new businesses.This indicates to us that companies are overestimatin

43、g the specialized talent available to accomplish their business-building goals.We have observed a prevailing trend across APAC-there is a strong bias towards upskilling internal talent,with companies introspectively assessing their internal talent pool.However,there remains a lack of effort in engag

44、ing with external talent and expertise in their business building endeavors.In addition to this talent gap,of the 40%of companies that admit to not being prepared for business building,the most significant missing strategic asset is a culture of innovation.Exhibit 7.This is a stark reminder that int

45、angible assets,such as company culture,can significantly influence a businesss potential for success and growth.Exhibit 7-A Culture of Innovation is a Significant Strategic Asset to AddressCulture of Innovation0%10%20%30%40%50%60%70%Companies prepared for business buildingCompanies not prepared for

46、business building67%43%17Three pillars of business building in APACSection 3 18Section 31Develop a robust talent strategy2Implement rigor in your business-building methodology3Foster a culture of innovation19Develop a robust talent strategy1Too few times do companies look outside their walls for spe

47、cialized talent necessary to drive disruptive programs.”Aparna Kapoor,Partner,BCG X SingaporeIt is pivotal that companies strike a harmonious balance between nurturing in-house talent and infusing fresh perspectives to avoid loss of experts and expertise that may have an outsized impact in determini

48、ng the odds of business-building success.The solution lies in defining the context of business building,and the best talent strategy to achieve those goals.If the venture aligns with your core business,leaning on internal talent familiar with the companys culture and operating procedures is a pragma

49、tic choice.In cases where ventures are branching out into new or adjacent domains,however,a different skillset and experience in business building is often required.Such ventures benefit from external recruits,unencumbered by pre-existing organizational paradigms or thought processes.These recruits

50、are free to quickly identify market gaps,understand clients real needs,run lean experiments to de-risk and move fast within the specific operational constraints,and much more.This fresh talent will occasionally interface with core teams,primarily to leverage the unique strategic assets that the pare

51、nt organization offers as a platform to business success.If you are a leader of a company looking to capture growth,a well-designed preparedness plan could change your trajectory and accelerate your time to value.This plan would require investment in underlying capabilities,not just in the individua

52、l business-building efforts.BCG X recommends three pillars to build the right foundation:20Implement rigor in your business-building methodology2Corporate venturing,when undertaken with appropriate rigor,has proven to have higher odds of success compared against traditional startups and corporate ve

53、nture capital.BCG X has launched over 200 ventures with this approach,delivering a success rate of 66%compared to typical rates of 20%to 30%for traditional and corporate venture capital methods.Embracing a thorough methodology for research and iteration early on can substantially mitigate product ma

54、rket fit challenges and viable business model risks.One strategy is to refine the approach and activities in early ideation and validation stages.It is important to determine if there is true willingness to pay for the solution prior to building.This can be done through multiple customer research me

55、thods,and an interactive approach to refining value proposition towards one which customers are happy to pay for.Realistic market sizing along with a well-defined investment prior to breaking even is equally important.This will help companies understand if they have identified a genuine opportunity

56、worth pursuing.In addition,collaboration with venture-building studios can elevate the business-building process.Such studios not only bring to the table their specialized expertise and methodologies but also empower in-house teams.By integrating external expertise with internal knowledge,companies

57、can benefit from a holistic approach to product development.21Foster a culture of innovation3Our extensive engagements with clients across APAC over the past year have illuminated a clear trendcompanies are placing growing emphasis on cultivating an innovative organizational culture.These companies

58、are increasingly harnessing BCG Xs expertise in venture building and innovation to strategize and implement effective innovation activities within their own organizations.Companies have rightly focused on operational excellence in their core activity,but operational excellence does not necessarily t

59、ranslate into a culture of innovation”Nipun Kalra,Managing Director and Partner,BCG X IndiaIf youre a leader looking to create a culture of innovation in your company,there are some important questions to consider:Have you implemented a comprehensive business-building methodology to streamline your

60、innovation efforts?Are your operational processes and resources in place to support venture building and innovative endeavors?Have you established a robust governance structure to facilitate innovation?Are you actively prioritizing the development of an innovative organizational culture?Are there cl

61、ear pathways and incentives for entrepreneurial talent to pursue business building?22Conclusion:Capturing value in APACs thriving growth landscapeBusinesses in the APAC region stand on the cusp of realizing unprecedented growth opportunities,with leaders poised to capitalize through a variety of bus

62、iness-building strategies.Insights from our survey reveal a clear trajectory for corporate leaders as they look to embrace these opportunities:The road ahead is filled with both challenges and immense potential.By strategically focusing on these key areas,APAC leaders can not only bridge existing ga

63、ps,but also harness the full potential of their business environments,paving the way for sustained growth and long-term success in the dynamic APAC landscape.Balance talent strategies.Blend internal upskilling with external expertise for a robust approach to business building.Enhance methodologies.I

64、mplement rigorous business-building methodologies ensure viable business models,strong product-market fit and other fundamentals.Leverage strategic assets.Strengthen core assets,most prominently a culture of innovation,to ensure the right building blocks to meet your growth ambitions.23About BCGXBCG

65、 X is the pioneering new tech build and design division of Boston Consulting Group.It is uniquely positioned to support companies seeking to kickstart the journey to new markets through venture opportunities.BCG X brings together advanced tech knowledge and ambitious entrepreneurship experience to t

66、urbocharge BCGs trusted corporate offering.The division is positioned to help organizations embrace,enable,and succeed in delivering innovation at scale,backed by over 3,000 technologists,data scientists,programmers,engineers,and human-centered designers located in more than 80 cities across the glo

67、be.Visit the BCG X website at more information on business building,please refer to our global report here Appendix24About the AuthorsHanno StegmannHanno is a member of the leadership team of BCG X,Boston Consulting Groups tech build and design unit.Hanno leads BCG X venture building across Southeas

68、t Asia.He is dedicated to inventing,building,investing in,and launching category-changing businesses at startup speed together with the worlds most influential corporates.Over the last few years,Hanno has launched more than 10 new businesses in various industrial goods and consumer products companie

69、s that have created billion-dollar impact.He can be contacted at Aarish NetarwalaAarish is a lead strategic designer at BCG X and an international award-winning and published designer.Having worked across the US and APAC markets in venture building,Aarish has been able to understand the dynamics of

70、each region firsthand.At BCG X,and beyond,Aarish has co-founded over 10 companies across the industrial goods,energy,sustainability and consumer verticals.He can be contacted at Abby ZhangAbby is a principal venture architect in BCG X Singapore.She has extensive venture-building experiences in consu

71、mer,cross-border ecommerce,smart appliance and healthcare sectors.A pioneer in fashion-sharing economy and sustainability,she is also a veteran in supply chain optimization.She was named Forbes Asia 30 Under 30 in 2017 and served as a Global Shaper by the World Economic Forum.She can be contacted at

72、 25Key ContributorsRomain de Laubier Managing Director&Senior Partner;Asia Pacific Regional Chair,BCG X Kevin Lucas Managing Director and Partner,BCG X SydneyNipun Kalra Managing Director&Partner,BCG X India Head,BCG X IndiaAparna Kapoor Partner,BCG X SingaporeThis article is written as part of the

73、Corporate Venture Launchpad 2.0 program,an expanded S$20m program by EDB New Ventures designed to enable companies to incubate and launch a new venture from Singapore,supported by venture studios experienced in corporate venture building.BCG X is proud to be an appointed venture studio of the program.In association