Emerging Markets Strategy - JCB Exploits the International Opportunity

Students looking for a great example of how a UK business can transform its fortunes by focusing on the opportunities in emerging markets need look no further than JCB.

Under the leadership of Sir Anthony Bamford, JCB has been transformed from a one-factory operation in Staffordshire with a turnover of £43 million to a global business with 22 plants around the world employing over 10,000 people making over 300 different products.

Recent results speak for themselves - JCB reported a turnover of £2.7 billion in 2012 and record earnings of £365 million. A new £63m factory was opened in Brazil in late 2012 and JCB has recently announced plans for a new £62m factory in Jaipur, India, which will open in late 2013.

JCB now has factories in the UK, Germany, North and South America, Brazil India, and China. The company employs some 7,000 people on four continents and sells its products in 150 countries through 1,500 dealer depot locations. The company has a range of more than 300 products.

However, JCB has certainly not be immune to the effects of the economic downturn. As this BBC article explains, in 2008 JCB's business felt the significant effects of the recession. Lack of credit had a big impact on customers' orders for diggers and construction equipment. Over the next 18 months, the firm shed 1,800 jobs.

So it turned to faster-growing demand from emerging markets (where equipment has been needed for the construction boom) to re-balance its business and reduce reliance on the UK economy.

These two videos provide further background insights into JCB's expansion strategy:

JCB in India (May 2014)