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Dalberg Workshop - Beyond BRIC
Dalberg Workshop - Beyond BRIC
Dalberg Workshop - Beyond BRIC
Dalberg Workshop - Beyond BRIC
Dalberg Workshop - Beyond BRIC
Dalberg Workshop - Beyond BRIC
Dalberg Workshop - Beyond BRIC
Dalberg Workshop - Beyond BRIC
Dalberg Workshop - Beyond BRIC
Dalberg Workshop - Beyond BRIC
Dalberg Workshop - Beyond BRIC
Dalberg Workshop - Beyond BRIC
Dalberg Workshop - Beyond BRIC
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Dalberg Workshop - Beyond BRIC

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  • 1. How to think about strategy fornew emerging marketsBeyond BRICDecember, 2010
  • 2. Dalberg provides strategic advice to funders, NGOs, social entrepreneurs,corporations, governments and international institutionsGlobal presence Expertise in topics critical to global development • Global health • Access to finance • Climate change, conservation and energy Copenhagen • Programs in conflict areas, and post-conflict recovery Geneva San New York • Agricultural development Francisco Washington DC • Education Dakar Mumbai • Human rights Nairobi • Emerging and bottom-of-pyramid markets Santiago • Corporate supply chains JohannesburgStrategic advisory services Broad range of clients and partners• Strategic roadmaps and portfolio design• Impact assessment• Multi-stakeholder facilitation• Recommendations on strategic partnerships• Due diligence on grantees/investees• Technical assistance to grantees/investees• Program/portfolio management World Bank• Operational improvements (for large programs)• Policy advice (for governments and international institutions) 1
  • 3. Most Danish companies are still producing in Denmark for a Danish or EUaudience Emerging Falling star Rising Star markets 75% of global Danish economic growth engineering Best Seller is taking place firms Bo Concept here Sales Majority of Danish SMEs Most Denmark/ Danish C20 companies EU Problem child Cash Cow Denmark /EU Emerging Markets Production 2
  • 4. Strategy formulation and execution is a different exercise when the contextmay change in a matter of months instead of years Megatrends have a faster acceleration and deeper impact.. • Urbanisation from rural to urban Demand and • The effects of climate change Development opportunity • Explotion in the need of health, and trends agriculture, and energy services due opportunity to demographics trends Still a reality, but in The new emergng reality... decline.... • Explotion in South-South trade • State own • Local financial are becoming enterprises that are Development sector Economic mature very active players trends conditions • Emergence of middle class with • Legislation not new demands implemented • Wish for technology leap • Hiring or firing of frogging staff can be a year • Governments that increasingly long exercise are becoming assertive and can • Red tape is given stimulate own economy • Desire for Public-Private 3 Partnership models
  • 5. Strategic thinking in frontier markets is a game of additionality Barrier of Value entrance Value proposition proposition Total Economics Value chain Acess Strategy for and frontier markets financing Access/par- tnerships Partnering 4
  • 6. How well does your product and business modelalign to the needs of the local market? The key challenges • How to avoid changing price • A Swedish house fabrication company policy, product features, and located in Malmø Value learning a new market in one proposition exercise • Offering: prefabricated houses and local • Avoid having too many production partnership business models running in 35% parallel due to the often very • Product: Structural insulated panels diverse market needs and (SIPs) that are made by sandwiching a spending potential of various core of expanded polystyrene (EPS) segments between two structural boards What can be done? 26% • Understand the public and private market segments and be willing to change e.g. from B to C models to B to B models • Avoid focusing only on countries, but give sufficient attention to the company’s role in a global or regional value chain 5
  • 7. How well does the value chain to your target market work? The key challenges Dalberg client NN, a multinational • How to recreate a profitable agriculture company seeking to enter business in a value chain, where African market many of the typical rutine and Value chain commoditized elements are weak • Across the value chain was obstacles in or non-existing origination, process & refining, • How to penetrate a market where packaging, marketing/distribution, and specific companies/public warehousing agencies are controlling vital parts of the value chain? • Also physical infrastructure, skills gab, and red tape and high tarrifs had to be addressed What can be done? 26% • Create partnerships with organisations that can provide capabilities to close the gaps in the value chain • Engage in policy dialogue and best practices with governments and potential develop joint programs • Establish alliances or acquire with gatekeeper businesses 6
  • 8. Who do you critically depend on in your value chain and what is the structureof the relationship? The key challenges • How to find the correct partners that can make up for the short Partnering comings in the value chains and eco systems? • How to constructive the true win- 35% situations, so non-traditional win partners also have a long-terms interest in sustaining the partnership? What can be done? 26% • Use analoges from other industries or other countries to find out what features the most desired partners should have • Consider all partner options from alliances, M/A, joint programs, etc. • Conduct very serious due dilligence on potential non- traditional partners 7
  • 9. By reaching out to 20,000 companies and score 800 institutions we found a newclass of very professional non-commercial partners The top of the list was a surprice to many in the sector
  • 10. Hundreds of programs are being now developed every year Agency – Program Key Figures Key Trends, Focus Areas and Partners DANIDA – Dept for $3M budget Partnerships focus on Danish-based organizations and local partners: Business 96 B2B •B2B Partnerships – Long-term business linkages with Danish & local companies Cooperation & TA partnerships •Innovative Partnerships for Development (IPD) – Partnerships in CSR and SRI 2008/2009 DFID Works across all sectors of donors and investors. Focus on MNC partnerships: aid: £3.3B (57%) • Push Boundaries – business practices to support MDG DFID – Business for bilateral, £2.3B • Promote growth –create the right conditions to encourage business Development (39%) multilateral £337B channeled • Responsibility –promote successful corporate responsibility thru UK NGOs DFID’s recent PPPs focused on transparency, health, & innovative finance facilities: •Extractive Industries Transparency Initiative (EITI) •Major funder of the GAVI Alliance • Helped create International Finance Facility for Immunization (IFFIm) 437 alliances •PPPs: partner through competitions, strategic alliances, financing facility $238.4M funds •Global Compact: coordinates the German Global Compact Network GTZ – Public-Private (thru 2007) •CSR: advisor to help companies address and implement CSR practices Partnership •Projects –56% in Asia & Africa; 41% in economic reform •Partnership Fund Ratio – 37% GTZ, 49% private, 15% other. $4-$5M est. budget Partner with private sector, multilaterals, civil NGOs and universities: for 2010 •Private sector partnering focused on financing, cooperation forums, dialogue, business SIDA – Dept of Dev information and competence development. Partnerships •Swedish Business for Development (B4D) – linking all businesses SMEs  MNCs $9B in alliances Leader in cross-sector partnering, focus on multiple partners and target USAID investment at 680 alliances ~25% and leveraging field staff to drive partnerships. USDA - GDA 1,700 partners •16 person team divided by region sector, technical training ~$15M program •Field-driven partnerships budget in 2005 •2.7:1 avg partners: USAID ratio •Moving toward Global Framework modelSource: Organization websites (links above), Partnering for Global Development (BCLC), Public-PrivatePartnerships Transform Aid (SSIR), AD internal research and analysis
  • 11. Partnership building has over the past 10 years gone from symbolic tovery operational and value-adding High Traditional Development: Emerging Partnership Models • Supply-side bias Complex Public Coalition Sector Structures Socialdevelopment Private Sector Market Based Approach Low • Demand-side bias Low Financial development High 10 Source: ”Development Collaboration: None of Our Business?”, Accenture Development Partnerships
  • 12. How much of the value of your products are you effectively able to capture? The key challenges • How to finance services from commercial and non-traditional Total economics partners in a way that still makes • Vestergaard Frandsen is a European ones own products profitable? company specializing in complex emergency response and disease control products (Bed nets, Lifestraw) What can be done? 26% • Create public-private partnerships • The company have several partnering • Find social investors that are models where they don’t bare all the costs willing to pay for the additionality to sell their products: • Connect north and south sales • Donation model e.g. via partnership and marketing efforts with Rotary • Find alternative income sources • Carbon credit markets (could over for partners make their Lifestraw free) • Joint programs with UNICEF, where their products in a part of a larger health package and campaign • Social investment, where Acumen is co-funding scaling up mechanisms 11
  • 13. Questions for discussion Questions • What do you see as the biggest barrier to getting started on emerging markets? • What do you anticipate to be the largest strategic challenge to obtain a correct posture in an emerging market? • Is there anything that the Danish Government or industry associations can do to help overcome these additional strategic obstacles 12

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