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The Global Have & Have Not Challenge

In an increasingly volatile global economy, few macroeconomic trends hold true across the diverse markets of the world. One trend that can be counted on across country borders, however, is a widening income inequality that polarizes households into Haves and Have Nots.

In an increasingly volatile global economy, few macroeconomic trends hold true across the diverse markets of the world. One trend that can be counted on across country borders, however, is a widening income inequality that polarizes households into Haves and Have Nots.

As a result, differentiating a value proposition between Haves and Have Nots is a good strategy across countries. The biggest challenge, however, is to understand where that dual value proposition needs to account for country-specific variations.

A framework that helps to identify the key country distinctions is one that “defines” and “divides” the Have and Have Nots.

  • The Definers. In the narrowest sense, the Have and Have Nots are defined by income distribution—and the specific income level that divides households gaining share of income from those losing share of income over time. More insightful, however, is a broader definition that identifies the attributes that tend to cause that income to lag or lead. Each country tends to have a different mix of attributes, mostly demographic, that defines the Haves versus Have Nots across generations over a long period of time. These attributes relate to the level and distribution of things like generational cohort, wealth, education, household type, urbanization, and retirement age.
  • The Dividers. Inflation pressures and government austerity are factors—primarily external forces—that will further divide the Have and Have Nots and affect their value equation in the years ahead, but this threat will be greater in some countries than others.

These defining and dividing factors can be used in various ways to identify opportunities and threats among the Have and Have Nots in country-specific ways. Ultimately, the appropriate assessment approach will depend upon the supplier or retailer situation.  This article provides some high-level conclusions based on an analysis of key markets in North America, Europe, and Asia against the various factors, and these conclusions are summarized by factors, countries, and implications.

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