New Business Models In Emerging Markets  

Oleh:

Eyring, Matthew J. ; Johnson, Mark W. ; Nair, Hari

Jenis: Article from Bulletin/Magazine - ilmiah internasional
Dalam koleksi: Harvard Business Review bisa di lihat di link (http://web.b.ebscohost.com/ehost/command/detail?sid=f227f0b4-7315-44a4-a7f7-a7cd8cbad80b%40sessionmgr114&vid=12&hid=105&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=bth&jid=HBR) vol. 89 no. 1-2 (2011), page 88-95.
Topik: Emerging economies; New Business Models; Middle market can be lucrative.

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Perpustakaan Pusat (Semanggi) Nomor Panggil: HH10.42 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Right now more than 20,000 multinationals are operating in emerging economies. According to the Economist, Western multinationals expect to find 70% of their future growth there—40% of it in China and India alone. But if the opportunity is huge, so are the obstacles to seizing it. On its 2010 Ease of Doing Business Index, the World Bank ranked China 89th, Brazil 129th, and India 133rd out of 183 countries. Summarizing the bank's conclusions, the Economist wrote, "The only way that companies can prosper in these markets is to cut costs relentlessly and accept profit margins close to zero." Yes, the challenges are significant. But we couldn't disagree more with that opinion. We have seen the opportunities of the future on a street corner in Bangalore, in a small city in central India, in a village in Kenya—and they don't require companies to forgo profits. On the surface, nothing could be more prosaic: a laundry, a compact fridge, a money-transfer service. But look closely at the businesses behind these offerings and you will find the frontiers of business model innovation. These novel ventures reveal a way to help companies escape stagnant demand at home, create new and profitable revenue streams, and find competitive advantage. That may sound overly optimistic, given the difficulty Western companies have had entering emerging markets to date. But we believe they've struggled not because they can't create viable offerings but because they get their business models wrong. Many multinationals simply import their domestic models into emerging markets. They may tinker at the edges, lowering prices—perhaps by selling smaller sizes or by using lower-cost labor, materials, or other resources. Sometimes they even design and manufacture their products locally and hire local country managers. But their fundamental profit formulas and operating models remain unchanged, consigning these companies to selling largely in the highest income tiers, which in most emerging markets aren't big enough to generate sufficient returns.

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