Review: Winning in Emerging Markets
“ Winning in Emerging Markets: A Road Map for Strategy and Execution “ by Tarun Khanna and Krishna G Palepu is a very useful book. It is not a particularly long book at 215 pages, and despite its brevity it is not a particularly easy read. But you should read this book.
The authors, both Harvard professors specialising in international business have provided a framework for developed world executives to get their heads around what is required for success in emerging markets around the world.
The key concept is the idea of “institutional voids”. That is, emerging markets don’t have the institutions and infrastructure (in the broad sense of the word, as well as its narrow definition) that emerging markets do. And each market is different in terms of what’s missing. Therefore, to succeed in a market, you must first understand what’s missing, then either recreate / simulate it or work around the void.
Examples range from the more obvious issues around legal institutions, through to the almost ubiquitous lack of in-depth market data.
This is a very simple concept that cuts to the heart of the problems most multinationals face in emerging markets, and – given the way we are trained – usually don’t cope with very well.
The book gives examples (they are not really case studies) of how multinationals have dealt with various issues and, in cases, turned these institutional voids into opportunities, and also devotes some time to successful emerging market giants, and how they have coped in their own markets, then adapted learnings to other emerging markets. This is particularly useful in that it gives insight to approaches and thought patterns that are quite different from those one finds in western multinationals.
Perhaps the most valuable item is a checklist that multinationals should ask themselves as they work through these thoughts. Some of the questions are very basic, some are profound. Together, though, they should trigger some thinking that will help a company refine its approach to emerging markets.