Winning Global Markets: How Businesses Invest and Prosper in the World's High-Growth Cities by Philip Kotler & Milton Kotler

Author:Philip Kotler & Milton Kotler [Kotler, Philip]
Language: eng
Format: epub
ISBN: 9781118893791
Publisher: Wiley
Published: 2014-08-06T00:00:00+00:00

How Reliable Are City Rankings and Ratings?

City ratings are seen as having several questionable characteristics. First, different rating services often produce inconsistent rankings for the same city region. Confusion may occur when a city receives the highest rating in one survey and then, a month later, another survey using similar criteria reveals that the same city has fallen into third position.

The second problem is that the same rating service can change the city's position in line with new definitions and methods of collecting data. This can generate frustration and, if methods undergo significant change, undermine general trust in the rating.

The third problem is the difficulty of rating hundreds of global city regions. There are so much data available that companies have difficulty extracting meaningful information.

A fourth problem is that, because most city rating surveys are conducted in English, results may be skewed toward expatriate sectors of regional communities and the Western MNCs within those communities. It is difficult to get data on the economic growth of midsize cities in emerging economies and the growth performance of midsize companies. For example, the strong growth rates of many second- and third-tier cities in China and India are hard to identify. Rating surveys do not drive down enough to strongly growing cities but tend to focus on first-tier cities that may have less growth opportunity than emerging cities. Professional analysis is necessary to find the truly best hot spots for business investment. It takes intensive investigation to get beyond the first-tier cities of China and India to discover the opportunities of Wuhan in China or Pune in India.

A final problem is particularly nettlesome. In their competitive battle for investment ratings, cities continuously expand the scale of their metro region to absorb the new economic growth of outlying districts, which often masks the declining growth of central cities. For example, Chicago data show growth, but the real growth of the metro regions is in the outlying towns and cities of Joliet, Geneva, Naperville, and Schaumburg and in other intrametro municipalities. The logistic and industrial hub of Chicago reaches far beyond the municipality of Chicago. Is Chicago growing, or is the growth in outlying towns and cities? Should a company locate in Chicago or in Naperville?

For a company seeking a new market location, city rankings and ratings should basically be seen as scanning tools supplying initial data. It would be foolish to rely on these alone. The company needs additional facts and needs to put customized values on these attributes.

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