We have all heard about the BRICS countries (Brazil, Russia, India, China, and South Africa) and how they are influencing the world economy. How can a company enter those and other emerging countries, whether to sell in, buy from or invest? Most importantly, once set up, how can a company engage the local staff to make the project successful? I studied this issue over a year ago and prepared a presentation on it. Have a look. As you can see, I consider women talent in those countries very under-utilized. They might be the secret to project success.

1. How to approach these
very different markets
1
Succeeding in
Emerging Markets
Source: THRIVING IN EMERGING MARKETS, 2011 Harvard Business School Publishing Corporation

2. Europe
Latvia
Lithuania
Croatia
Hungary
Poland
Armenia
Belarus
Bosnia Herzegovina
Bulgaria
Montenegro
Rep. of Moldova
Romania
Ukraine
Russia
Serbia
FYR Macedonia
Kenya
Togo
Tunisia
Uganda
Zambia
Zimbabwe
Lesotho
Libya
Madagascar
Malawi
Liberia
Mali
Mauritania
Mauritius
Morocco
Mozambique
Namibia
Niger
Nigeria
Rwanda
Senegal
Sierra Leone
South Africa
Sudan
Swaziland
Middle East
Bahrain
Kuwait
Oman
Saudi Arabia
Qatar
United Arab Emirates
Iran
Iraq
Jordan
Lebanon
Syria
Turkey
Yemen
Equatorial Guinea
Algeria
Angola
Benin
Botswana
Burkina Faso
Burundi
Cameroon
Chad
Comoros
Côte d'Ivoire
Djibouti
Egypt
Eritrea
Ethiopia
Gabon
Gambia
Cape Verde
Central African Rep.
Ghana
Guinea
Guinea-Bissau
Countries considered emerging or developing countries?
East Asia
& South Asia
Brunei Darussalam
Afghanistan
Albania
Bangladesh
Bhutan
Azerbaijan
Cambodia
China
Pakistan
Fiji
Vietnam
Georgia
India
Indonesia
Kazakhstan
Kyrgyzstan
Lao PDR
Tajikistan
Malaysia
Maldives
Mongolia
Solomon Islands
Sri Lanka
Myanmar
Papua New Guinea
Philippines
Nepal
Thailand
Timor-Leste
Turkmenistan
Uzbekistan
Caribbean
Bahamas
Trinidad and Tobago
Haiti
Dominican Rep.
Jamaica
Latin America
Argentina
Chile
Belize
Bolivia
Guatemala
Guyana
Honduras
Brazil
Colombia
Costa Rica
Uruguay
Venezuela
Ecuador
El Salvador
Panama
Nicaragua
Paraguay
Peru
Suriname
Mexico
2
Africa
Based on IMF, World Band and
United Nations Development
Program (UNDP)classifications

3. 3The market within these countries
Emerging market population by annual income
In emerging markets there is a great
percentage of the wealth at the top, but
most of the market demand and growth is
not here.
This middle group (2.6 billion people, as of
2005) has discretionary income and spend
on education, health, energy, transportation
and personal care.
This is where great demand growth will be
in the years ahead.
4 billion people live on less than US$2/day
in emerging markets. There is growing
demand here, but most products and
services usually needs supported with
NGO, foundation or government assistance.

4. 4Studying the market
1. Exhibitions: Present current product at exhibitions in the industry.
2. Customer visits: Visit target users with samples and ask what they
like and dislike and what price is appropriate.
3. Current products on market: Study what similar products are
available in the market now and at what price.
4. Surveys: Do one-on-one surveys to find out what people want.
5. Target group discussions: Prepare a prototype and conduct 20-
person meetings to get opinions on how it can be improved.
Exhibitions
What’s used now.
Customer visitsFocus Groups
Surveys

5. 5Uncover unmet needs
1. User observation: Study how the product is used now and
learn what users are trying to achieve.
2. Application search: Look for alternatives for your type of
product that consumers may buy. Investigate a wide range
of substitutes, not just what your competitors make.
3. Watch for compensating behavior. Discover what jobs
people are not performing well. Find better, less expensive,
faster or easier methods. Look for modifications by users.
4. Search for explanations. Uncover the root causes of
customers’ behavior by asking what people are trying to
accomplish with the goods and services they use.
How products are used

6. 6
Different marketing conditions between
industrialized and emerging markets
SellerBuyer
Bank
Making
user aware
of my
product?
OK
OK
No
good
1. Market research companies: In most emerging markets there are few quality market
research companies. Therefore, a foreign multinational must conduct its own studies
to find the target customer and offer what is needed.
2. Employee recruiting agencies: In most emerging markets there are few quality
executive search companies. Therefore, a foreign multinational must use its own
internal staff initially, then slowly develop and train local staff.
3. Business legal system and business agreement laws: Legal systems and business
laws can be unreliable and not enforced like in advanced nations.
4. Distribution system and transportation services: Distribution and transportation could
be a concern and different than a more advanced country.
5. Credit and payment systems: The local payment methods may be very different and
complicated. They might have to be improved on where possible.
6. Supplier quality and availability: Quite often the required suppliers and materials are
not available, or they are but do not reach the quality standard needed.
7. Local skills & trade school reliability: Technical skills required might not be available
or technical schools that offer those skills are not available.
8. Advertising, customer communications: Can the user read? How can a company
create awareness within the emerging market?

7. 7Key Emerging Market Strategies
1. Create customized offerings: Considering the company’s expertise and
strengths, notice how products are used in the market and modify current
company products to better serve the local situation.
2. Develop business models to overcome obstacles: Through data
gathering and small pilot runs, find out in detail what the obstacles are to
succeed. Learn what can be done to overcome them and if it is worth
the effort.
3. Deploy cutting-edge technologies: By using available, standardized
advanced technology, create jobs that need little training, experience
and skills (simple deskilled processes). Also, improve both speed and
quality of communication.
4. Tap low-cost labor: Study the cost of purchasing, installing and
maintaining advanced equipment, and compare that cost to local labor
cost. The hiring, training and supervising of local people could be much
less costly, and it can build a highly skilled organization for the future.
5. Build scale quickly: After success in one region, to avoid quick copying
by competition, a company should find trusted partners nationwide and
cover the whole country quickly.
6. Develop local management talent: Local management talent is always
a key to success. Developing local management is vital for growth.
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②
③
⑤

8. 8
After 15 years, McDonald’s took 80% of the fast-food Russian market.
McDonald’s in the US: McDonald’s outsources most of the supply chain operations
in the US and wanted to find suppliers for Russia in the same way.
Russian local suppliers: There were no qualified local suppliers no matter how hard
they looked.
Current European suppliers: McDonald’s approached all their current European
suppliers to see if they would be interested in Russia. None were interested.
McDonald’s decides to set up its own supply operation:
1. They set up a joint venture with a local partner, the Moscow City Administration,
to identify farmers and bakers.
2. Imported cattle from Holland and potatoes from America.
3. Hired agricultural specialists from Canada to improve farm management
practices to develop local sources.
4. Advanced Russian farmers money for seeds and equipment.
5. Invested in an operation to produce beef, bread products, potatoes, and dairy
products and purchased to specification ketchup, mustard and Big Mac sauce.
6. Set up a fleet of trucks for supply distribution.
7. Set up a financing program with all outside suppliers.
8. Brought in expatriate managers to train all Russian managers on McDonald’s
standards, quality and operating system.
McDonald’s in Russia
Failed FailedObstacle

9. 9Capitalizing on women talent
 Finding talented people in emerging markets is always a problem.
 But, there is a large population of energetic, ambitious, skilled
women in these markets that are very underused.
 Foreign companies coming into these markets are finding ways to
recruit, train, retain and support them, so they can improve their life
style and contribute to their community and organization.
 To be successful, there are family, transportation and commute
issues that must be addressed.
 Universities are a good place to find this female talent.
 Helping women build support networks has helped to retain key
women staff.
 Offering coaching support has also been a good method of making
women employees become professional.

10. 10Impact in investing in emerging markets
Impact Assessment Framework
Potential changes in human relationships
Sellers Buyers Community
Impact? Impact? Impact?
Potential changes in finances and living standards
Sellers Buyers Community
Impact? Impact? Impact?
Potential changes in skills and human development
Sellers Buyers Community
Impact? Impact? Impact?
Community
BuyerSeller
Standard of living
Skills created
Individual
relationships
Group
relationships
Major foreign businesses moving
into emerging markets will have
an impact on the buyer, seller
and community in general.
Explore what that impact is.
Standard of
living
SkillsRelationships

11. 11
Hidden risks in
emerging markets
Balance profits with political influence
Most companies involved in international business protect their investments against currency
movement, price changes and other risks with legal contracts, insurance and trade financial
contracted agreements.
These approaches offer little against local government policy risks.
Government expropriation: One policy risk is outward and direct government seizing of foreign
assets. This has disappeared in most countries in recent years, as countries will lose their foreign
investment attractiveness.
Hidden risks: There are hidden risks (laws, procedures, operating and investment requirements)
that must be managed though. Here is how to reduce political risk.
1. Goodwill: When a country experiences problems, that is the best time for a foreign company to
show that it is there to help.
2. Impression creation: Prepare to convince the people and government of the country that wealth
can be created working together.
3. Finding concerns of all stakeholders: Identify all people influenced by the foreign investment.
What are their major worries? Conducting knowledge-transfer and training helps. Support to
develop libraries, schools, computer labs and housing for the poor have proven to be good
investments. Promote that your company is a great country asset regarding their concerns.
4. Study local attitudes: To learn local attitudes, direct consulting and informal chats with
employees, local business partners and supply chain affiliates are ideal. Also, consulting with
professional experts in various fields could be helpful. Other sophisticated risk scenario
computer software analysis could also be helpful.

12. 12
How much should a company try to influence change
in the emerging market?
How much should a company adapt to the local market from
the products/service/operations in its base market?
How much of a company’s assets should be invested
in the emerging market?
Heavily invest in
emerging market
Stay totally away for
emerging market
Heavily maintain core
market strategy
Heavily adapt strategy
to local situation
Influence local emerging
market very little
Heavily influence change in local
emerging market
Strategies to apply in
emerging markets
Profit
Risk
Cost

13. If done right, working in emerging
markets can greatly increase a
company’s profit as well as secure its
long-term future.
13
Succeeding in
Emerging Markets
Source: THRIVING IN EMERGING MARKETS, 2011 Harvard Business School Publishing Corporation