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Win in Emerging Markets

Emerging markets present opportunities to drive growth, reduce costs, and acquire talent. These markets comprise more than half of global GDP growth and around 40% of global GDP. The future leaders in many global industries will be those companies that can best serve these markets.

Most multinational companies based in the developed world already have a sizable presence in emerging markets. Despite their strong ambitions to globalize, many struggle with growth and/or profitability in some of the major regions in which they do business. In such cases, . A good strategy is not good enough. Companies need to up their game in execution.

Why the gap? There are several crucial execution challenges companies face when attempting to win in emerging markets:

  • Finding, Retaining, and Developing Talent. The people agenda is the biggest struggle, yet it’s a critical area to get right. Success in emerging markets depends on having a strong local workforce.
  • Adapting an Organizational Structure to Local Needs. Expanding the company’s geographical footprint leads to extra layers and complexities in managing functional and business units. A strong global governance model is important. So is a clear vision for the role of headquarters versus local business units.
  • Building Adequate Supply Chain, Sales, and Go-to-Market Efforts. Establishing a global supply chain and setting up adequate sales and go-to-market approaches require large investments and close knowledge of the local ecosystem, suppliers, partners, and customers. It pays to invest in this area.
  • Mastering Successful M&A. Global mergers and acquisitions expertise are complex, with many steps involved in a successful deal: target selection, due diligence, bridging cultural differences, and integration. Often companies are weak in capabilities such as establishing effective support from the center of the organization.

Closing the Gaps

What can you do to help close the gap between aspiration and performance? Here’s how companies can set a course in emerging markets.

Emerging-Market Opportunities and Targets

Market Understanding

Business Model and Product Portfolio

Stakeholder Management

Organization and People

Leadership and Headquarters Support

Globalization
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