Increasingly business managers have to plan their strategies to take emerging markets such as India, China, Brazil and many other developing economies into account. Winning in Emerging Markets aims to provide a set of tools to allow businesses to make sense of the challenge and opportunity of rapidly growing new markets.
Part I – Conceptual Introduction: the Nature of the Challenges
In Part I of Winning in Emerging Markets the first chapter introduces the idea of “institutional voids” as a major challenge to companies trying to enter and succeed in emerging markets. These institutional voids take many forms but are where there is a lack of services, regulatory, information and other frameworks that support, and are taken for granted in, mature markets. This is an important contribution by Winning in Emerging Markets as it highlights important issues that could easily be missed by companies moving from highly developed economies.
Chapter 2 explores the response required to identify and deal with institutional voids in the new economies through case studies and toolkits. Some of the checklists may appear individually superficial but as part of the wider challenge are essential to provide background and for completeness. They are needed as it would be very easy, as the case studies show, for new entrants to make unconscious assumptions and not even check that all basic market functions exist in the target market.
Part 2 – Applications: What Does it Mean for Existing Players and New Entrants?
The second part of Winning in Emerging Markets examines the challenges that all, new entrants and existing, businesses face in succeeding in such markets and breaking out from them to become global players. The five chapters which are rich in well researched case studies consider:
- Exploiting Institutional Voids as Business Opportunities. New entrants in emerging markets should avoid frustration and use the lack of intermediaries and structures by seeing them as a business opportunity and the chance to adopt new ways of working.
- Multinationals in Emerging Markets. Many multinationals have been in the new markets since the early days of liberalization so their success, and failures, provide useful case studies for those new to these markets.
- Emerging Giants: Competing at Home. The large domestic businesses have built their competitive advantage on understanding and dealing with institutional voids. This understanding has allowed them to grow rapidly and to expand domestically and provide a platform for global expansion. It provides possible models for others to learn from.
- Emerging Giants: Going Global. The emerging giants face new challenges as they break out into the global market where their competitive advantage based on filling institutional voids is less strong. The breadth of opportunity in these wider markets and their differences complicate the challenge. Furthermore institutional voids and business practices in home markets that were not important for purely national giants can become an issue as they go multinational.
- The Emerging Arena. Finally Winning in Emerging Markets focuses on the consideration of the “emergingness” of developing economies to inform the opportunities and response of would be players in such markets. It explores both analysing the potential for existing or modified products and services as well as the entrepreneurial opportunities presented by the institutional voids. Emerging markets are changing rapidly and Winning in Emerging Markets, A Road Map for Strategy and Execution provides an invaluable insight and toolkit for assessing business and marketing strategy.
Understand and Use the Local Market Structures as an Opportunity
Winning in Emerging Markets provides a structured approach to strategic planning based on a thorough understanding of the challenges. Although of particular value to those companies entering emerging markets from mature economies Winning in Emerging Markets is also pitched at those businesses in rapidly changing countries that wish to succeed nationally and eventually become global players.
The writing style and the use of case studies make this is a very readable book but still with considerable depth and value for corporate strategists. By adopting the approach and knowledge in Winning in Emerging Markets managers will be able to analyse the local structures and use their understanding of the institutional voids as an opportunity and a pathway to success. It will enable the reader to avoid the assumptions that have tripped up many previous attempts by outside companies to enter these new markets.
Winning in Emerging Markets, A Road Map for Strategy and Execution (2010, ISBN: 978-1-4221-6695-6) by Tarun Khann and Krishna G. Palepu is published in hardback by Harvard Business Press at $35.
The Authors
Tarun Khana is the Jorge Paulo Lemann Professor at Harvard Business School and an author of several books on emerging markets.
Kishna G. Palepu is the Ross Graham Professor of Business Administration and Associate Dean for Internal Development at Harvard Business School.
Other Reading about Emerging Markets and especially India
India is one of the fastest growing centres for international trade and is branching out globally by acquiring major global companies. Anyone with an interest in doing business in or with India should read The Indian Way, Imagining India and India's Global Powerhouses to understand how Indian business works.
Martin P Wilson - Martin is a director of major business change & turnaround consultant by profession but a widely published writer & photographer by ...
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