The world's leading multinationals are facing an unprecedented competitive challenge from a new group of fast-globalising companies based in rapidly developing economies (RDEs), according to a report published today by The Boston Consulting Group (BCG).

BCG has identified 100 such challenger companies, with combined 2007 revenues of $1.5 trillion, that are either catching up with or have already overtaken their longer-established rivals in the United States, Europe, Japan, and elsewhere. And if any of these companies stumble and fall during the global economic crisis, there are many others ready to take their places.

The findings in the report-titled The 2009 BCG 100 New Global Challengers: How Companies from Rapidly Developing Economies Are Contending for Global Leadership-serve as a wake-up call for the CEOs of today's corporate giants.

Produced by BCG's Global Advantage Initiative, the report is based on a detailed screening of more than 3,000 companies from rapidly emerging economies to ensure that the candidate companies were truly RDE-based, before applying a set of quantitative and qualitative criteria, including company size.

Finally, it looked at three years of financial data and scored the remaining companies using globalisation criteria, including the company's international presence, its major international investments pursued in the past five years, the breadth and depth of its technologies and intellectual property, and the international appeal of its offerings and value propositions.

In a stark warning, David Michael, the report's coauthor and a BCG senior partner based in Beijing, said: "For those who make the right moves quickly, the challengers could become clients, suppliers, and even strategic partners. For those who don't, the challengers will represent fierce competitors."

Chinese companies dominate the list, numbering 36, followed by firms from India (20), Brazil (14), Mexico (7), and Russia (6). For the first time, the Middle East is represented, with four companies from the United Arab Emirates and 1 from Kuwait.

Their rapid rise reflects the speed with which these countries are endeavoring to build economies that are not dependent on oil and gas. In all, 14 countries are represented in the list.

The companies are drawn from a wide range of industries-from natural resources and metallurgy (20 companies), to food and beverages (13) and carmakers and component suppliers (10).

In addition to some widely known names-for instance, China's Lenovo Group and India's Tata-this year's BCG 100 New Global Challengers list also contains some lesser-known corporations. These include Kuwait-based Agility, one of the world's top ten logistics service providers, and Dalian Machine Tool Group, China's largest machine-tool company.

By several measures, the BCG 100 New Global Challengers are already outperforming established industry leaders. Their revenues grew by 29 percent per year in dollar terms from 2005 to 2007, significantly outpacing the S&P 500, Nikkei 225, and DAX 30. Moreover, they earned average 2007 operating profit of 17 per cent.

But these companies are not immune from the damaging effects of the global downturn. Last year, the crisis took its toll on their formerly soaring stock prices.

Nonetheless, according to Arindam Bhattacharya, the report's coauthor and a BCG partner based in New Delhi, the challengers have been adept at changing, learning fast, and adapting their businesses to the new economic environment.

Bhattacharya says, "To contend with significantly more volatile costs, they are diversifying geographically, optimising their supply chains, improving their productivity, passing costs on to others where possible, and seeking government support. So, despite the crisis, most of the companies in BCG's New Global Challengers list will become increasingly competitive on the international stage."