How to Continue Your Expansion in Emerging Markets in this Recession
Ruth Stanat, President and CEO, SIS International Research
January 26, 2009
Since the fall of the Berlin Wall in the early 1990s, multinational firms have rushed into emerging markets as the “last gold rush.” This was and continues to be the platform for corporate growth in the next few decades. During the 1990s, multinationals expanded into China and other Asian markets, in addition to Eastern and Central European economies and in Latin America. With continued liquidity and financing available in the capital markets, this continued expansion into emerging markets was an integral part of most corporate strategic and expansion plans. However, during this most recent financial and liquidity crisis this past year, the game has changed.
The Current Challenge
Companies are increasingly halting research concerning market opportunity expansion into these emerging markets in the past six months. As budgets and payrolls are getting slashed, expansion into emerging markets is being put on the back burner for most global firms. However, those firm that have the foresight to continue these research programs are prone to have a significant competitive advantage in the future when the economy rebounds.
The challenge that CEOs and senior management face today is how to continue these expansion programs in these emerging markets with limited budgets and the prospect of failure given a perceived rise in risk.
Market Assessment and Market Entry Research do not have to stop during these recessionary times. Rather than spending large sums of money on primary research to conduct market entry and market segmentation research, a modest research budget might be possible to still keep you in the global game. The following are some considerations for a limited market assessment budget in these lean times. These will not work for everyone, but incorporate some of the concerns and risks that many companies now face.
Phase I: Market Intelligence
This phase will primarily use a secondary research methodology which will offer a snapshot or a lay of the land picture of the market opportunity for a region of specific countries. The results of this phase will deliver a prioritization of the countries which offer “the low handing fruit” for exportation of products or for local production of products.
Phase II: Limited Qualitative Research or Key Opinion Leader Interviews
Rather than channel interviews