Many of the most successful companies in the world have discovered that their prosperity frequently comes from a focus on narrow slivers of business, a lightening of the asset base, and globalization. In Asia, a lot of executives are skeptical about this approach; often, they are bound to the conglomerate model and to a focus on asset-intensive local industries. Nonetheless, our research suggests that the best-performing companies in Asia have already adopted the strategies that have proved successful elsewhere in the world.
To identify the most successful companies in Asia, we ranked its 200 largest by the value they created for their shareholders from December 1995 to May 2001.1 Not surprisingly, given the recent economic difficulties in the region, we found that 73 percent of its companies underperformed the Morgan Stanley Capital International (MSCI) World Index (Exhibit 1), which comprises all of the world’s major stock markets, weighted by their relative market capitalization. Among the laggards were some of the biggest and best-known corporations in Asia.
What sets apart its big value creators from other companies in the region are the strategies of expanding quickly to capture global market opportunities, atomizing (that is, picking a relatively narrow market...