Approaching Emerging Markets
Many global consumer goods (CG) companies have a good handle on processes and relationships to draw on when expanding into emerging markets. But, mid-size firms often find themselves in a situation of many unknowns. This month, Kirk W. Wheeler, EVP/GM CPG Practice for Manthan, expands on the right approach to partnering and leveraging analytics in emerging markets (EM).
What are some of the important criteria when choosing EM partners?
Wheeler: The desire to rush into an opportunity can be extremely tempting without the level of due diligence often needed. The pathway is littered with firms looking for quick wins and trusting without verifying. Much has been written on financial due diligence but other areas are just as important and can be easy to overlook:
How should one approach analytics with limited data?
Wheeler: Don’t expect to get system wide syndicated data in most EM to the detail you may be use to. Daily flash reports, probably not. In addition, the data that’s available either internally or externally is often used simply for static measurement. In many cases, metrics are reported as up or down, good or bad within a single area and measure. The transformation to using ‘data’ to drive insights to action doesn’t yet exist in many companies within EM. At the same time the limitations of developed markets relative to ‘data oligopoly’ often doesn’t exist either. The ability to get creative and tap into new sources of data is available and often more cost effective than initially apparent. One such example is government data. In one EM, we found high-quality monthly POS data for an entire category, including competition available through the Department of Revenue. Another real opportunity is leveraging the wide usage of mobile technology in EM. Crowd sourcing is becoming common, more so than in developed markets. Market audits can be done at a fraction of the cost in the United States. Bottom line: Think outside the box and you may find you’re pleasantly surprised with both the quality and quantity of data available to build a successful partnership.
What role does “analytic” technology play in EM?
Wheeler: Even with the limited amount of data, many employees, and hence companies in EM, are tech savvy. Applications that focus on descriptive analytics are more the norm but predictive applications are starting to gain popularity as skills develop. A critical but often over-looked need is the development of an “Analytic Road Map”. Creating a vision for analytics usage and transformation within an organization is often well received in EM. With the preponderance of mobile connectivity in these markets, the ability to develop advanced modeling capabilities is right around the corner.
What are some of the important criteria when choosing EM partners?
Wheeler: The desire to rush into an opportunity can be extremely tempting without the level of due diligence often needed. The pathway is littered with firms looking for quick wins and trusting without verifying. Much has been written on financial due diligence but other areas are just as important and can be easy to overlook:
- Business cultural and ethical alignment: EM can be ‘gray’ so understanding where the two organizations are/aren’t aligned relative to behavioral patterns, social responsibilities, reporting etc., becomes key.
- Clarity of roles and responsibilities: In the ‘dating process’ of partnership it’s easy to gloss over hard conversations in hopes of finishing details later. Understand what success looks like and align on mutual performance expectations.
- Partner depth within the EM: Do your partners really have the infrastructure they claim? Being led into a market tour and seeing the “best” execution needs to be juxtaposed with seeing the worst. Unannounced plant visits can be uncomfortable but only if there is something that’s being hidden.
How should one approach analytics with limited data?
Wheeler: Don’t expect to get system wide syndicated data in most EM to the detail you may be use to. Daily flash reports, probably not. In addition, the data that’s available either internally or externally is often used simply for static measurement. In many cases, metrics are reported as up or down, good or bad within a single area and measure. The transformation to using ‘data’ to drive insights to action doesn’t yet exist in many companies within EM. At the same time the limitations of developed markets relative to ‘data oligopoly’ often doesn’t exist either. The ability to get creative and tap into new sources of data is available and often more cost effective than initially apparent. One such example is government data. In one EM, we found high-quality monthly POS data for an entire category, including competition available through the Department of Revenue. Another real opportunity is leveraging the wide usage of mobile technology in EM. Crowd sourcing is becoming common, more so than in developed markets. Market audits can be done at a fraction of the cost in the United States. Bottom line: Think outside the box and you may find you’re pleasantly surprised with both the quality and quantity of data available to build a successful partnership.What role does “analytic” technology play in EM?
Wheeler: Even with the limited amount of data, many employees, and hence companies in EM, are tech savvy. Applications that focus on descriptive analytics are more the norm but predictive applications are starting to gain popularity as skills develop. A critical but often over-looked need is the development of an “Analytic Road Map”. Creating a vision for analytics usage and transformation within an organization is often well received in EM. With the preponderance of mobile connectivity in these markets, the ability to develop advanced modeling capabilities is right around the corner.