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Emerging market strategy: innovating both products and delivery systems

Bala Chakravarthy (Shell Chair in Sustainable Business Growth and Professor of Strategy and International Management, at IMD, Lausanne, Switzerland (Chakravarthy@imd.ch) is a consultant to senior management at a number of multi‐national firms)
Sophie Coughlan (Research Associate at IMD, Lausanne, Switzerland (Sophie.Coughlan@imd.ch))

Strategy & Leadership

ISSN: 1087-8572

Article publication date: 1 January 2012

4255

Abstract

Purpose

Low customer purchasing power and lack of adequate infrastructure are two difficulties that restrict opportunities in any emerging market. This paper seeks to describe how to overcome these hurdles.

Design/methodology/approach

The paper blends two different perspectives on emerging markets: unearthing opportunities at the bottom of the pyramid, and coping with institutional voids, to offer a unified framework and illustrate it with examples.

Findings

In order to fully leverage the opportunities afforded by emerging markets, companies need both product and business‐system innovations. The former is needed to serve customers at price points that they can afford and the latter to reach them in the market and to offer them additional services that have the potential to justify a price premium or at the very least will build brand loyalty.

Research limitations/implications

The proposed strategy has its own risks. But there are potential payoffs as well. Further research is needed to assess these tradeoffs.

Practical applications

The article explains how companies that learn to offer combinations of product and business‐system innovations can dominate the emerging markets they enter.

Originality/value

The article provides a model showing how companies can fully leverage the opportunities afforded by emerging markets,

Keywords

Citation

Chakravarthy, B. and Coughlan, S. (2012), "Emerging market strategy: innovating both products and delivery systems", Strategy & Leadership, Vol. 40 No. 1, pp. 27-32. https://doi.org/10.1108/10878571211191675

Publisher

:

Emerald Group Publishing Limited

Copyright © 2012, Emerald Group Publishing Limited

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