What makes a successful emerging market growth strategy?

          EMERGING MARKET GROWTH STRATEGY

For every company that wants to remain competitive, growth in third world emerging countries is significant. Brazil,Russia, India, China, Mexico, Turkey, and Indonesia—are expected to contribute about 45 percent of global GDP growth in the coming decade.Emerging markets will represent an even larger share of the growth in product categories that are highly mature in developed economies.
While multinational companies have historically used emerging markets primarily to reduce costs, organizations are increasingly looking to these markets as a platform for revenue growth through 2014 and beyond.

There is no one-size-fits-all strategy for capturing consumer growth in emerging markets. But clearly traditional country strategies and other aggregated approaches will miss the mark because they can’t account for the variability and rapid change in these markets. In this fierce competitive landscape, it is clear that emerging-market consumer shifts into higher gear, companies that think about growth opportunities at a more granular level have a better chance of winning. Driving growth in emerging markets has fundamental implications for a company’s business strategy, operating model, and risk management capabilities.

The companies surveyed found the greatest success in emerging markets, came to understand the special requirements of customers in each emerging market and then designed offerings to meet their needs at market appropriate prices. A key ingredient in success was to establish company-owned production, service, distribution, R&D, and other operations in emerging markets to become closer to customers and part of the local business community.

Following are some of the successful emerging market growth strategies in the recent times:

     Opportunities remain in the BRIC :  were most likely to expect revenue increases of 25 percent or more over the next three years in Brazil, India and China.

    Bigger the better: Companies had revenues of $5 billion or greater—those larger companies were more likely to have exceeded their sales revenue goals in emerging markets over the last three years, while small companies were the least likely to have done so.      

    Go local:  Having Local operations may provide advantages such as greater knowledge of customer needs and buying habits, greater brand awareness in the market, and more experience in navigating government approvals and procedures.In addition, some successful strategies were using local sales/service centers, employing company-owned sales and distribution, and employing a company-owned supply chain

·  Know your customer: Designing products specifically for customers in the local market and offering a different value proposition were considered as among the most successful strategies. One of the top emerging market challenges  studied was to provide products/services that meet customer needs at prices they can afford.

References:
1) http://www.mckinsey.com/insights/growth/is_your_emerging-market_strategy_local_enough
2) http://www.strategy-business.com/blog/Why-Strategy-Matters-in-Emerging-Markets-After-All?gko=dd7bf