How do you adapt your business model to emerging markets?
Emerging markets offer great opportunities for growth, but also pose unique challenges for businesses. How do you adapt your business model to suit the local context, customer needs, and competitive landscape? Here are some tips to help you succeed in these dynamic and diverse markets.
Before you enter an emerging market, you need to do your homework. Research the economic, social, cultural, and political factors that affect your industry and target segments. Identify the gaps, needs, and preferences of your potential customers. Assess the strengths, weaknesses, opportunities, and threats of your competitors and partners. Use both quantitative and qualitative data to build a comprehensive picture of the market.
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In addition to understanding the external factors of the market, it's also essential to assess your own organization's readiness and capabilities. This involves identifying your current strengths, weaknesses, and resources, and determining how you can leverage them to enter the market successfully. You may need to adjust your products, services, or business model to fit the market's unique characteristics. You'll also need to consider factors such as logistics, supply chain, and distribution channels to ensure that you can deliver your offerings efficiently and effectively. Taking the time to evaluate your internal capabilities will enable you to make informed decisions about entering the market and increase your chances of success.
Based on your market research, you need to tailor your value proposition to the specific needs and expectations of your customers in the emerging market. This may involve modifying your product or service features, benefits, pricing, quality, or delivery. You may also need to adapt your branding, messaging, and positioning to resonate with the local culture and values. Think about how you can differentiate yourself from your competitors and create a unique value proposition that appeals to your target segments.
There are different ways to enter an emerging market, such as exporting, licensing, franchising, joint ventures, or wholly owned subsidiaries. Each option has its own advantages and disadvantages, depending on your goals, resources, and risks. You need to weigh the trade-offs between control, cost, and speed, and choose the entry strategy that best suits your business model and market conditions. You may also need to adjust your entry strategy over time, as the market evolves and your business grows.
One of the key factors for success in emerging markets is building strong and lasting relationships with local stakeholders, such as customers, suppliers, distributors, regulators, media, and influencers. You need to establish trust, credibility, and goodwill with these groups, and understand their needs, interests, and expectations. You also need to respect the local norms, customs, and etiquette, and communicate effectively across cultural and linguistic barriers. You may need to hire local talent, partner with local firms, or engage with local communities to enhance your local presence and reputation.
Emerging markets are constantly changing and evolving, and so should your business model. You need to be flexible, agile, and responsive to the market feedback, trends, and opportunities. You need to test and validate your assumptions, learn from your failures, and iterate your solutions. You need to innovate and experiment with new products, services, processes, channels, or business models that can create value for your customers and stakeholders. You need to embrace the uncertainty and complexity of emerging markets, and leverage your creativity and adaptability.
Finally, you need to monitor and evaluate your performance and impact in the emerging market. You need to set clear and realistic goals, metrics, and indicators that reflect your objectives and strategy. You need to collect and analyze data and information that can help you measure your results and outcomes. You need to review and adjust your plans and actions based on your findings and feedback. You need to track and report your progress and achievements, and celebrate your successes and learnings.
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Two things I would add and ( more than often overlooked) - identifying how the demand drivers shape the future customer demands and trying to disrupt it on the value chain - go beyond the existing customers domain into the non customer tiers which will tape into a new demand
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