New Business Models for Emerging Markets

In the above Harvard Business Review video, Matt Eyring, president of Innosight, explains why disruptive innovation in developing countries means not just tweaking, but instead rethinking, your business.
Right now more than 20,000 multinationals are operating in emerging economies. According to the Economist, Western multinationals expect to find 70% of their future growth there—40% of it in China and India alone. But if the opportunity is huge, so are the obstacles to seizing it. On its 2010 Ease of Doing Business Index, the World Bank ranked China 89th, Brazil 129th, and India 133rd out of 183 countries. Summarizing the bank’s conclusions, the Economist wrote, “The only way that companies can prosper in these markets is to cut costs relentlessly and accept profit margins close to zero.”…What’s often missing from even the savviest of these efforts is a systematic process for re-conceiving the business model.
Some tips:
  • Start in the Middle: Identify unmet needs that can be fulfilled at a profit
  • Offer Unique Benefits for Less: Focus on affordability and access
  • Integrate the (Business) Elements
  • From Blueprint to Operating Business: Testing and implementing the business model blueprint in emerging markets is as much an art as a science

Read more at Harvard Business Review