“Emerging markets share of global market capitalization could overtake developed markets’ share by 2030” Goldman Sachs.
Most recently, I have chosen to work managing businesses in countries, commonly defined that as emerging markets. The reason – I believe that the world is changing. I am convinced that the future of businesses and prosperity lies where there is higher economic growth.
It is natural to assume that where there is higher economic activities businesses will expand faster. At the same time, the challenges that higher growth geographies represent, are different and often not easier to overcome. The challenges vary from these present in developed countries. Often, these are related to regulation, security, relationship with governments and government owned businesses. Risk levels in emerging markets are inevitably higher.
Out of my experience, building expansion strategies for higher growth countries significantly differs from efforts in developed countries. Researching and understanding the country where you want to expand its legal system, economics, culture and society to me is step number one. Focus on key strategic tasks and most significantly their impeccable execution are enormously important. Having clear vision how to collaborate with regulators can yield great results. Forming a strategic alliance and finding a key advocate for your product or service can be helpful. As an example, we can take my recent experience in Pakistan.
Before visiting the country, I found that there are around 500 companies listed on the exchange, each and every single one being a potential client for the company I represent. Also, I knew that the exchange has recently hired a new CEO, charged with the task to drive change, modernise the institution as well as brighten its international image to attract foreign investors. The main task I had set for myself was to establish a strategic partnership with the exchange, so together we could develop our businesses. A week after he was already on our TV channel. The strategy go-live has happened.
Implementing a strategy, in my view is at least if not more important than developing one. The same applies to emerging markets. Cultural understanding, adaptability, while keeping core focus at the growth of your business is key to success. Engaging with local partners and empowering them to act as your advocates is among the best ways to ensure successfull execution of your chosen way forward. Test and learn approach is particularly important while developing an emerging market. Having well thought response mechanisms is also important as sometimes the unknown will happen and there should be a process to follow when circonstances like that occur.
Altough implementing an emerging markets strategy often equal exploring unkown business horizons, having a set of mile stones helps measuring the progress towards achieving your final goal is helpfull. Reflecting once in a while on what goes well and what can be improved yields better results especially in emerging markets where learning about the local culture, market and business practice are key success drivers.
Quantifying the impact you while implementing emerging market stratgies needs to be acute and fine tuned. The process of carfully choosing and adjusting success criterias is the only guarantee that the emerging market you work on will be developed in an educated constrantly improving manner.
Flexibility, adaptability and constant eagerness to learn are key drivers to developing a successful expansion strategies for emerging markets. Willingness to take risks and quickly learn from mistakes are also paramount. Collecting carefully and analysing relevant data are helpful. Feel free to drop me a line to discuss your plans and share your experiences. Keen to learn and contribute with what I can to your success.
Boris Grozev is a seasoned fintech executive. Entrepreneur by heart Boris has helped number of businesses to create and implement business development and product strategies. His advisory work in Emerging and Frontier markets has promoted culture and technology change, fostered innovation and lead to tangible results. He invests in variety of asset classes. Boris is a fast learner, whose leadership abilities, ambition, stamina, passion to succeed and attitude naturally spread to others helping to achieve common goals.