Tuesday, April 26, 2016
"Strategies That Fit Emerging Markets"
I enjoyed reading about the various dynamics one should consider when determining whether or not entry into an emerging market makes sense for their organization. The authors of, “Strategies That Fit Emerging Markets” highlighted a lot of interesting ideas around political and social systems, openness, labor markets and capital markets. However, one area I think the authors overlooked in their analysis is the importance of technology. I think a countries ability or willingness to adopt technology is also a very important aspect to consider when entering emerging markets. Like we read in “Ten IT-enabled business trends for the decade ahead” by McKinsey Global Institute, technology is changing the way individuals conduct and evaluate business.
Technology enables people and organizations to bridge gaps unlike ever before. Assuming that the political and social systems, product markets, and the openness of a country are in alignment with your organizations infrastructure and business model, I believe that technology can help bridge various capital and labor market gaps that might otherwise exist. As an example, the article mentions that you might want to consider the level of education or any language barriers that might exist in an emerging market. However, I believe when technology is properly leveraged it enables organizations to conduct business and overcome obstacles that previously would have been restricting.
To further elaborate, one area where technology could be leveraged in a labor market would be to use software programs to properly train and educate individuals who may need some additional support. This type of engagement and training could serve as a good alternative to costlier options like, in country resource relocation. Also, in my opinion, investing in the people of another country would build loyalty between the employer and their future employees.
Moreover, there are many applications and collaboration tools available today that can provide effective language translation as well. Therefore, an organization should not allow the education level of individuals in the selected country or their linguistic capabilities create barriers that ultimately deter them from entering a market. Organizations should carefully evaluate whether or not the people of the country can be trained or educated. If so, they should explore how technology can help them achieve their educational and communication goals. Also, organizations should consider how long it would take to get a return on their investment and whether or not it is worth the effort.
Another area where technology enables people to conduct business unlike before is in capital markets. I understand that every country has their own sets of regulations, laws and policies that they must abide by. However, I believe that it would be worth exploring how you could use technology to enable different banking and payment options. With the increased use of technology, the banking industry is much more agile and fluid than ever before. Tools like ecommerce, and electronic payment make doing business in other countries much easier.
Overall, I really enjoyed learning about the various areas you should consider when determining whether or not to enter an emerging market. The only thing I would suggest is that we should consider the use of technology as another dynamic to consider when evaluating whether or not we want to enter an emerging market.