Brazil, Russia, India, and China, together with the Middle East and Turkey, are among the fastest-growing markets in the world. Yet doing business in these countries comes with a unique set of challenges, and the terrain is all too frequently fraught with landmines. Without adequate preparation, even the most seasoned multinational companies can quickly find themselves outmaneuvered by savvy local competitors. After jumping headlong into emerging markets, many companies discover only too late that the formula for success at home is ill-suited for the new market environment abroad.
The key to succeeding in emerging markets, explains Simon Paris, senior vice president of SAP EMEA Emerging Markets, lies in finding the critical balance between an organization’s empirical knowledge and local expertise on the ground. “You have to be prepared to forget what you think you know,” says Paris. “No two countries are alike. Tried-and-true formulae don’t necessarily work here. You have to approach these markets as an entrepreneur.” Although there is no single path to success, starting out with the fundamentals in place is critical. Successful companies in emerging markets take great care in building solid, local infrastructures on the ground from the get-go. Strong supplier networks, robust payment systems, and logistics partners top the list. But another crucial element is a localized IT strategy. Companies with well-run business processes that address local requirements are simply better positioned to hold their own against established local incumbents. They also have a better chance to outmaneuver other multinational new arrivals.
Free download: The current issue of SAP SPECTRUM Issue 2 | 2010.