Multinationals flee 'Uber syndrome' to emerging markets

Multinationals consider Kenya a prime location for expansion, even as they risk disruption by start-ups such as Uber.

Thursday March 10 2016

“The ‘Uber syndrome’– where a competitor with a

“The ‘Uber syndrome’– where a competitor with a completely different business model enters your industry and flattens you, is putting the world’s top executives on edge,” says the report. PHOTO | FILE 

By LILIAN OCHIENG'
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Multinationals consider Kenya a prime location for expansion, even as they risk disruption by start-ups such as Uber, says a new report.

The IBM Global C-suite study launched Thursday states that one in every five multinationals now risks being disrupted by start-ups.

IBM states that 24 per cent of the over 5,000 CEO interviewees across 70 countries including Kenya are leading innovators, outperforming big multinationals in profits.

“The ‘Uber syndrome’– where a competitor with a completely different business model enters your industry and flattens you, is putting the world’s top executives on edge,” says the report.

Piotr Ruszowski the chief marketing officer of Mondial Assistance, Poland is quoted saying, “The biggest threat is new competitors that aren’t yet classified as competitors.”

Further, IBM states that the firms are now seeking strategies to cushion them from disruption; majority are moving to emerging markets, Kenya, Nigeria, South Africa offer growth for the multinationals.

NEW MARKETS

“There is greater focus on new markets, more decentralised decision-making styles,” says the report, “In short, torchbearers are better prepared to recognise and deal with attacks from digital invaders, and they’re deploying some of the same tactics their rivals use.”

The study says that CEOs are more aware of the top trends shaping business which are; technology, market factors, regulatory concerns, macro-economic factors and people skills.

IBM states that CEOs in the prime emerging markets are also terrified of outsiders trying to grab their market share. Such an instance is seen in the entry of Uber, Facebook and Netflix in the local market which is widely contented by competitors.

“Long-established enterprises can’t simply jettison valuable brands, legacy systems or their duty to shareholders,” IBM states adding that torchbearers do have a far keener sense of how the battleground has shifted and are poised to strike back.

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