- Emerging Market (E7) could grow around twice as fast as advance economies (G7) on average.
- Six of the seven largest economies of the world are projected to be emerging market economies led by China (1st), India (2nd) and Indonesia (4th). From 2016 to 2050’ China’s share of world GDP (by PPP) estimated to grow from 18% to 20% and India’s GDP (by PPP) will grow from 7 % to 15 %.
- The USA could be down to 3rd place in Global GDP ranking while EU27’s share of world GDP could fall below 10 % by 2050.
- Emerging Economy need to enhance their institutions and their infrastructure significantly if they wish to realise their long-term potential.
In 1995, the E7 were held the size of G7 and in 2015, E7 was almost the same as G7 and it is estimated that E7 will be doubled the size of G7 in just 25 years i.e.2040. (Source: IMF for historical GDP, PwC analysis for projection in 2050).
- E7: China, India, Indonesia, Brazil, Russia, Mexico, Turkey
- G7: US, UK, France, Germany, Japan, Canada and Italy.
Challenges of Emerging Market:
Top Management of many international companies (especially from G7 cluster) acknowledge that globalisation is the most critical challenge they face today.
Emerging Market is often addressed at VUCA World. VUCA is an acronym (artificial word), first used in 1987 and based on the leadership theories of Warren Bennis and Burt Nanus, and stands for Volatility, Uncertainty, Complexity and Ambiguity.
Many times, companies have realised that unethical business practise is part of the VUCA world, that makes emerging countries recognised as VUCCA World.
There are lots of complexities in emerging market like socio political factors, quality of market infrastructure, cost driven customer mindset, less effective legal system, government regulations and controlled markets etc. Despite of those factors, E7 markets are on the path of growth trajectory.
From past few decades many multinational corporations have eyed on emerging market by leveraging their cost competitiveness and large market size. However, it is noticed that corporation from G7 couldn’t smoothly transfer the business model and strategies that they have successfully deployed in their own countries.
Strategies to Win in Emerging Market
Since 1990, developing countries has been fastest growing market for product and services and companies from developed world started manufacturing and support centres in those countries where there is cost competitiveness where skilled labour, managerial skills and infrastructure is relatively inexpensive. Many early entrants learnt by “Trial & Errors “in emerging market that they needed a completely different model of business strategy in emerging markets than the strategic framework they have adopted in G7 markets. Several developing counties companies have entered into G7 with the low-cost strategy in Automobile, Engineering , FMCG, White Goods and IT Services but for the companies from G7 to enter into E7 market is relatively tough, G7 companies needs to develop strategies across their value chain with the developing countries ,they will not be competitive for long. The new trend from the G7 of aiming at E7 countries, not only for cost effective manufacturing / support destination but to gradually penetrate till the bottom of the pyramid with innovative and cost-effective business model to tap vast consumer market, especially the middle class.
Successful companies have realised that business model and strategy for doing business with emerging market is completely different than they use that at their own country and must find local ways of implementing it in emerging markets.
There are three core strategies to thrive in E7 market.
Adapt Business in E7
To thrive in E7 markets, multinationals must modify their business models for each nation and adapt their local market (product, supply chain and raw material) but without changing their core values and business propositions. If companies make the radical shift in adaptation, they will compromise their global branding.
Change Market in E7
Many multinationals are powerful enough to alter the market or industry in which they operated by changing the business context, either increasing the quality expectations from consumer or creating a value system that can help them on global scale and not only fight on cost competitiveness.
Leverage Synergies of E7
It may be impractical or uneconomical for some firms to adapt their business models to emerging markets. While companies can’t use the same strategies in all developing countries, they can generate synergies by treating different markets as part of a system. For example, companies can make parts in Brazil and develop their software in India to generate synergies by making different markets as part of their total value system.
Antares Vision is geared up for embracing this change
Antares Vision S.p.A. has long back anticipated the “change” in world economy and market dynamics. Almost a decade back, corporation had already started exploring Emerging E7 Countries and establishing stable, sustainable and scalable base, begun with learning their local business culture, socio-political environment, government policies, customer mindset, local physical and digital infrastructure etc.
Today, Antares Vision and its group companies have direct presence in E7 countries in form of subsidiaries, JV or presence through strong partners.
As per the PwC framework for businesses operating in Emerging Market, there are three key factors which influences G7 companies into E7 Markets.
- Operational Efficiency: Improve cost efficiency while serving most profitable customers.
- Innovation: Localise ability to design products targeted for local customers
- Go to Market Excellence: Embed the sales organisation in the local market
Antares Vision Group of Companies, continuously investing in enhancing its technology platform and offering along with building global presence. The core objective is to help our customers to succeed in every part of the world by proactively respond to the dynamics of the market.
With the help of traceability and disruptive technologies, Antares Vision and its group companies are prepared to help their business partners (customers) to succeed, not only in western world but also into the E7 countries where “the supply chain” becomes very critical for successful business in those countries .
Antares Vision end to end traceability platform powered by digital and disruptive technologies can certainly help companies (not from G7 but also from E7) to bring cost competitiveness into their operation (at the plant level) as well as designing integrated, visible, agile, safe and secured supply chain to thrive their business operations.
To reach directly to the consumer, Antares Vision offers innovative “customer experience and consumer engagement tools” which can be effectively leveraged by any companies in G7 or E7 market.
Antares Vision is shifting its gears to embrace the change to help our customers to succeed in global markets, leveraging digital and disruptive technologies for operational efficiency and go to market excellence.
Are you ready?
Antares Vision Group of Companies looking forward to becoming your growth partner across the world.
To learn more about our digital Innovations in supply chain and “go to market excellence“ please contact: email@example.com