Competitive Advantage in Emerging Markets Written by Martin Roll
That China and India are fueling the global economy with its more than 3 billion consumer market and thriving national economies is well acknowledged. Equally well acknowledged is the quest of many global companies to gain a substantial market presence in these economies in order to grow and be competitive in the new business landscape, as can be evidenced by the ever growing foreign direct investment into both these countries and the number of global companies entering these markets.
Not so apparent is the gradual emergence of local powerhouses that have managed not only to challenge the market leaders that invariably tends to be global brands but also to usher in new ways of competing that are challenging the well established competitive routines of the mighty incumbents. The increasing salience and relevance of the bottom of the pyramid (BOP) market in emerging economies is actively providing hitherto non-existent opportunities for companies to capitalize.
Local companies in emerging markets are leveraging their knowledge of the market, customer mindsets and access to local human, social and intellectual capital to bring to market products and services that not only compete head on with market leading brands but also that have managed to grab market share from the incumbents. Given their geographical proximity combined with their insider status allows for these local companies to edge out global competitors quite aggressively in a gradual but steady manner.
Two examples will drive home the point. Baidu.com is the leading search engine in China. Buoyed by an initial investment by Google in 1999, Baidu.com has perfected the art of attracting Chinese users and offering them services that even Google is finding difficult to compete against. Baidu.com has not only outsmarted Google in its own game of online search but has also managed to build substantial relationships with all the key stakeholders such as the regulatory authorities who play a substantial
Not so apparent is the gradual emergence of local powerhouses that have managed not only to challenge the market leaders that invariably tends to be global brands but also to usher in new ways of competing that are challenging the well established competitive routines of the mighty incumbents. The increasing salience and relevance of the bottom of the pyramid (BOP) market in emerging economies is actively providing hitherto non-existent opportunities for companies to capitalize.
Local companies in emerging markets are leveraging their knowledge of the market, customer mindsets and access to local human, social and intellectual capital to bring to market products and services that not only compete head on with market leading brands but also that have managed to grab market share from the incumbents. Given their geographical proximity combined with their insider status allows for these local companies to edge out global competitors quite aggressively in a gradual but steady manner.
Two examples will drive home the point. Baidu.com is the leading search engine in China. Buoyed by an initial investment by Google in 1999, Baidu.com has perfected the art of attracting Chinese users and offering them services that even Google is finding difficult to compete against. Baidu.com has not only outsmarted Google in its own game of online search but has also managed to build substantial relationships with all the key stakeholders such as the regulatory authorities who play a substantial