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Respond to Localization Pressures in EMEA

Respond to Localization Pressures in EMEA

Overview

Pressure on multinationals to manufacture locally in a diverse range of emerging markets in Europe, the Middle East, and Africa (EMEA) has been intensifying over the past several years.

Because of strategic and resource constraints, EMEA leaders often face dilemmas in selecting which markets require a shift toward local production in this environment.These will only become more acute in the next several years, so EMEA leadership teams need a structured, objective process to assess which markets they should prioritize for localization.

This report provides context about what to expect in terms of localization conditions going forward, as well as a structured framework for evaluating and comparing candidates for localization. This is helpful not only for balancing conflicting demands from within the organization, but also for narrowing down the countries that truly deserve the resource- and time-intensive feasibility analysis for local manufacturing.

What you will learn

  • What are the main pressures businesses face in the Europe, Middle East & Africa region
  • How will localization pressures force companies to rethink their future trajectories
  • Which countries will be impacted the greatest
 


Executive Summary
Pressures on MNCs to localize are growing
Protectionist measures have been rising
The stakes are likely to get higher
MNCs face dilemmas on localization
Balance competing demands
Suggested process for evaluating tradeoffs
Use diagnostics to compare options
Step 1: Understand the Drivers of Localization Pressures & Their Future Trajectory
Drivers of Localization Pressures in EMEA
Slower Demand Growth
FX Depreciation
Government Policies: Sticks and Carrots
Fiscal Pressures
Diversification Priorities
Short-Term Forex Issues
Job-Creating Mandate
Ideological Priorities
Key EMEA Markets: Localization Pressures
Diagnostic #1: Localization Pressures
Step 2: Assess Fundamental Market Attractiveness for Localization
Assessing Market Attractiveness
1. Market Size
2. Labor Quality and Cost
3. Raw Materials: Availability and Cost
4. Infastructure Quality
5. Availability of Incentives
6. Tariffs and Non-Tariff Barriers
7. Cost of Insuring Against Risk
8. Taxes
9. Local Supply Chain Quality
10. Property and Investor Rights Protection
Diagnostic #2: Market Attractiveness
Step 3: Analyze the Gap and Compare Markets for Investment
Diagnostic #3: Gap Analysis
Next Steps for Low-Score Markets
Key EMEA Market Analysis: Localization Pressures and Fundamental Attractiveness
EMEA Markets: Comparative View
Turkey: Attractiveness
Turkey: Localization Pressures
Saudi Arabia: Attractiveness
Saudi Arabia: Localization Pressures
South Africa: Attractiveness
South Africa: Localization Pressures
Russia: Attractiveness
Russia: Localization Pressures
Nigeria: Attractiveness
Nigeria: Localization Pressures
Egypt: Attractiveness
Egypt: Localization Pressures
Algeria: Attractiveness
Algeria: Localization Pressures
Iran: Attractiveness
Iran: Localization Pressures
About Frontier Strategy Group

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