Home to most of the world’s population and growing at double-digit rates, emerging markets in Asia, Latin America and Eastern Europe represent a must-win area for multinational companies. Bain helps companies to navigate this unfamiliar terrain, competing against other multinationals and local companies.
Home to nearly 85 percent of the world's population, emerging markets are growing at double-digit rates across Asia, Latin America and Eastern Europe. In some consumer segments, they account for more than 50 percent of worldwide demand. To compete in this unfamiliar terrain and against global "emerging-market champions," multinationals need a deft set of strategy guidelines–ones that meld their existing scale with organizational nimbleness and local insights.
While each market requires different adaptations, Bain & Company research and experience have found that emerging-market winners share common practices that we call the "six hard rules":
- They enter the mass market to achieve scale in distribution, brand building and operations
- They localize at every level, taking the time to learn and master local market complexities, such as distribution, packaging and consumer preferences
- They develop a "good enough" cost mentality, entering large and flourishing markets for what we call "good enough" products, with higher quality than low-end goods but affordable prices that still generate profits
- They think globally, but hire locally to provide a competitive edge in product design, promotion and distribution
- They make sure local acquisitions have a strong business fit, for example, by adding popular local brands, with a stronger distribution network
- Most of all, they organize for leadership by building dedicated emerging-markets capabilities
For multinationals, succeeding in emerging markets is increasingly essential in order to defend and increase their share of the global market. Ultimately, how they fare there is a key indicator of how they do everywhere else in the world. We have helped hundreds of multinational companies enter this burgeoning market, helping them devise strategies and long-term capabilities that become distinct advantages as growth slows in the developed world.