Question

List and discuss three (3) strategy options for competing in emerging markets.

Answer 1

Three strategy options for competing in emerging markets are:

• Diversification and Alliances
• Implementation of the 80-20 rule
• Investment in new technologies and furthur research.

Lets discuss the options one by one.

• Diversification and Alliances: The vision of major businesses has changed from the improvement and development of a single product to the introduction of multiple products in the recent era. Most companies which had a single product policy tends to create a kind of monopoly and large profits in its initial period but fails to withstand the competition from rivals with multiple products in the long run. The consumer tends to get attracted to a new product and this may help the first mover of the product initially.But as the product becomes imitable and as new varieties of the product becomes available with cheaper prices, then its just a choice from among the lot for the consumers and thus the company with the single product in their product line suffers the most. Many studies have found that diversification of product lines has helped major businesses in the 21st century in sustaining the market pressures.And most of these companies were having non related products in their diversification.Expanding the product line not only helps in profits, but also increases the goodwill of the company.Along with product diversification it is very much necessary to introduce these products to new and foreign markets. This is possible today only through alliances with more companies and business groups and state governments. Strategic alliances, Joint ventures, Mergers are all ways in which market is expanded by reaching wider audiences in the existing market and introduction into new and emerging markets respectively.
• Implementation of the 80-20 rule: The 80-20 principle should be implemented in the management of your business in this evolving market scenario.The Pareto rule of 20 percent of activities contributing to 80 percent of operational efficiency holds very much relevant in today's corporate scenario.This has led to the widespread implementation of outsourcing strategy. The activities related to the core business should only be handled by the company and other auxilery and supporting activities should be outsourced and sub contracted.The 80- 20 rule is also applicable to the marketing strategies of a company or organisation. It should be noted that 80 percent sales comes from the 20 percent of total customers of the business.So it is very much important to define the customer before preparation of the marketing plan and marketing budgets. The specific target groups should be identified and steps should be taken to increase the market penetration in areas of larger customer base and programs and incentives should be introduced to increase the customer satisfaction of key customers.
• Investment in new technologies and furthur research: The major problem faced by most corporates in todays business scenario is the emerging technologies like AI and robotics and the improvements in existing technologies like 4K and 3D printings. Investments in new and emerging technologies is key to sustain in the emerging market. Many corporates are reluctant to invest in advanced technologies due to the high cost associated with these technologies. But the results are negative for such business entities. Though the initial cost is high , the profits associated with the use of these technologies in the long run is tremendous. This is due to the fact that the technologies like AI and machine learning increases the quality of the products and services by improving the accuracy of business and manufacturing processes associated with it. A research and Development wing must be instituted for continued improvement of products and services and to introduce more accurate and efficient products so as to compete in the market with multiple players.