12 Tips to succeed in High Growth Markets
Recogido de Global Arena.com por CEDE como tema del mes–At the Annual Investment Meeting Dubai 2011, where our CEO, Peter Storm delivered a key-note speech on future FDI developments, we met with many CEO’s of multinational companies and high-ranking government officials from Emerging Countries, or, as they prefer to call themselves, High Growth Countries. One of the topics we discussed was the large variation in success achieved by multinational companies expanding into High Growth Countries and Regions. I think that this exchange of ideas is worth sharing, so I’ll try to summarize the conclusions in this article.Why are some companies more successful than others in establishing a market position in Growth Markets? Or another way of putting it is: Why are some very well established companies not able to reach the same position in High Growth Countries? In this last statement you find the key to the mistake most commonly made: What works well in Established Markets, will also work in the New Markets. Said that, bellow you will find 12 Tips to succeed in High Growth Markets divided in 3 different areas: market entry, corporate control, and product development.
Market Entry:
• Unless you are amongst the likes of Gucci, Ferrari or Prada, a brand name in the Western World is of little significance in an High Growth Country
• When you enter a market early, a good branding policy and overall presence can give the perception of a market leader, also when you are not a world player
• Branding and presence should preferably be done by staff originating from the market you are trying to penetrate, connecting to your potential clients is essential.
• Set long term goals and do not expect positive returns any sooner than in your other markets
• Expect economic downturns to be steeper than you are used to, but also the bounce-back will be stronger. Many companies gave up on the first local crisis because it looked so severe, keep thinking long-term
• Unless you are amongst the likes of Gucci, Ferrari or Prada, a brand name in the Western World is of little significance in an High Growth Country
• When you enter a market early, a good branding policy and overall presence can give the perception of a market leader, also when you are not a world player
• Branding and presence should preferably be done by staff originating from the market you are trying to penetrate, connecting to your potential clients is essential.
• Set long term goals and do not expect positive returns any sooner than in your other markets
• Expect economic downturns to be steeper than you are used to, but also the bounce-back will be stronger. Many companies gave up on the first local crisis because it looked so severe, keep thinking long-term
Corporate Control
• Make sure that local management consists of local managers that you assign a coach from your international management. Give your local management team long term goals and a mandate to adept to rapid changing market conditions. Small, agile marketing teams with “room to manoeuvre” prove to be best performing in Growth Markets.
• On Head-Quarter level, have a dedicated Director for High Growth Markets. Flexibility is the key to success here, long established Sales & Marketing routines will limit you too much.
• As Mr. Kleisterlee, who just stepped down as CEO of Philips put it: “We only see significant growth possible in Emerging Markets, and we have to reflect that approach in our Board as well, I expect at least two members from Emerging Markets to join the Board of Philips soon”
• Make sure that local management consists of local managers that you assign a coach from your international management. Give your local management team long term goals and a mandate to adept to rapid changing market conditions. Small, agile marketing teams with “room to manoeuvre” prove to be best performing in Growth Markets.
• On Head-Quarter level, have a dedicated Director for High Growth Markets. Flexibility is the key to success here, long established Sales & Marketing routines will limit you too much.
• As Mr. Kleisterlee, who just stepped down as CEO of Philips put it: “We only see significant growth possible in Emerging Markets, and we have to reflect that approach in our Board as well, I expect at least two members from Emerging Markets to join the Board of Philips soon”
Product Development
• Set up R & D centers in the region that you want to penetrate, staffed by local employees. This gives you a strong connection to your potential clients
• Set up brands that are perceived as local brands, consumers in High Growth Countries do tend to take pride in buying locally developed and produced products.
• Include not only your product in “localizing” efforts. Packaging, Advertising and choice of Sales Channels are equally important to success
• Consider to “downgrade” your product portfolio to serve market needs. Achievable products creating a quick win for their users will precede more complex and capable ones.
• Set up R & D centers in the region that you want to penetrate, staffed by local employees. This gives you a strong connection to your potential clients
• Set up brands that are perceived as local brands, consumers in High Growth Countries do tend to take pride in buying locally developed and produced products.
• Include not only your product in “localizing” efforts. Packaging, Advertising and choice of Sales Channels are equally important to success
• Consider to “downgrade” your product portfolio to serve market needs. Achievable products creating a quick win for their users will precede more complex and capable ones.
