Posts Tagged ‘Emerging Markets’

“Get a Load of Our Stuff!”

Wednesday, November 4th, 2009

The Wall Street Journal/MIT Sloan Management Review published a disturbing paper on why Western companies are failing to transform the Bottom of the Pyramid into a booming consumer market.  The author argues that the base of the world’s economic pyramid – where people live on $2 a day or less – isn’t panning out as a market because potential consumers “haven’t been conditioned to think that the products being offered are something one would even buy.”

To support his argument, he cites the case of PUR, a low-cost water purification system developed by Procter & Gamble. The product provides the obvious benefit of affordable clean water where the risks of drinking contaminated water are high. But curiously, PUR* achieved low market penetration rates in test markets.

Why would consumers reject a product as salient as PUR? The author contends that Western companies simply haven’t created demand among low income consumers. “Companies must create markets—new lifestyles—among poor consumers,” he insists. His prescription is that Western businesses need to do a better job “conditioning” low-income  people to be better consumers.  Really?

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Posted in Business Model, Emerging Markets, Sub-Sahara Region | Comments

Services Beyond Borders

Monday, July 27th, 2009

Every service interaction, regardless of the market, presents a unique opportunity to build a lasting relationship.

Working in diverse, global markets has been a lifelong learning experience for me. One of the more interesting and unexpected insights I’ve gained is that the similarities between people outweigh the differences.  We’re more the same than they we are different. I found this particularly striking while on a recent trip with stops in Africa, the Middle East and Eastern Europe.

Once the patina of culture is peeled away, people everywhere crave the same things — respect, appreciation and attachment. I call these “primal drivers” because they’re powerful, deep-seated, and universal. Once we satisfy them, we engender trust with customers and can then uncover their unmet needs.  I think that’s where the real opportunity lies.

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Posted in BoP, Relational competency, empathy | Comments

Delivering to Emerging Markets

Monday, November 17th, 2008

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For those interested in delivering their services to emerging markets, BusinessWeek provides an informative piece on Cisco’s EM strategy. The piece provides a glimpse of the company’s ambitious model for expanding its global footprint.

The story doesn’t delve into exactly how Cisco collaborates with emerging players aross geographic and cultural differences, etc.  Often cultural disparities plague global alliances. I wondered how Cisco’s people engage their counterparts in emerging markets?  Has Cisco developed a collaborative model for bridging the cultural gaps that often hamper global service initatives?  These are my questions…

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Posted in Emerging Markets, Gulf (GCC) Region, R=G | Comments

“3b” Broadband on the Horizon

Tuesday, September 9th, 2008

The satellite company, O3b Networks, has attracted investors at Google, HSBC Principle Investments and Liberty Global for its project to deliver cheaper, high-speed wireless Internet access to underserved regions of the world. The term, ‘O3b’, refers to the “other 3 billion,” or the large segment of the world’s population that can’t access the Internet because there is no fiber cable in their regions. 

03b, a Jersey Island (UK)-based company, announced that it is building 16 satellites that will enable lower-cost Internet accessibility over 3G and WiMax networks. These satellites will provide “trunking” or backhaul  coverage zone between +/- 40 degrees of latitude which blankets much of the world’s underserved regions including Latin America, the Middle East, Africa and South Asia.

Fiber cable and the labor for digging fiber trenches in underdeveloped countries is costly by any measure. Mobile operators face prohibitive costs in building transmission capacity between their networks and towers. Using satellites had been long been considered problematic due to their latency or the time it takes for a signal to travel between earth and satellites.

Today’s geosatellites orbit the earth at an altitude of 22,500 and their latency can exceed 600 milliseconds. By contrast, O3b plans to use MEO satellites which orbit the earth at 5,000 miles and can reduce latency to only 120 milliseconds—not that much more than a fiber network. 

O3b which expects to activate service by late 2010 intends to provide speeds of up to 10G bps (bits per second) to regions. The companies collectively invested about $65 million with the total cost estimated at $650 million.

This is good news for “3b” consumers, and probably a smart investment for Google which recognizes that the majority of the world isn’t currently using its services do to lack of access.  With their $10M investment, Google is getting in on the ground floor, so to speak.  Consider this another milestone in moving forward their Android initiative. 

Want more info?  Download this PRI (Public Radio) Podcast, Google to invest in internet start-up (4:30). 

   

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Posted in BoP, Emerging Markets, Telecommunications, What's Next? (WILD CARD) | Comments

More on Serving the BoP

Wednesday, August 20th, 2008

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Here’s an interesting piece in Time (July 31, 2008), The Creative Capitalism Roundtable, featuring a conversation with Bill Gates, CK Prahalad and others sharing their views on creative capitalism and the Bottom of the Pyramid.  Their conversation led to a discussion of the telecom industry at the BoP:

 Stengel [Managing Editor - Time]: C.K., I know that Bill was influenced by, by your work, and one of the questions I have, and I guess it’s a question both about creative capitalism and how you see it, is that, when it comes to cell phones for Kenyan farmers for example, isn’t this just good old fashion capitalism in the sense that it’s a recognition of a market that people hadn’t figured out how to profit from, and now, and now they are.

Prahalad: I think it is, but there’s a twist to it, and I think it’s an important twist. If you look at traditionally how we have looked at all this product and services especially high-tech products like cell phones, we would never have gone to the poor. But, I think that growth opportunity is there, as the cell phones have demonstrated. Also, it is changing the asymmetry of information, be it the farmer, who can now get prices, weather conditions, or someone who can make small transactions with SMS messaging, suddenly the asymmetry of information which is the essence of poverty — that is why people are poor, they don’t have access to information — that is changing very, very dramatically. What is happening in the cell phone industry, three billion people are connected for the first time in human history, I think it will be four billion soon. That I think gives me tremendous confidence that we can really take Bill’s idea and see it through to its logical conclusion, which, for me, is how to democratize commerce.

Food for thought…

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Posted in BoP, Sub-Sahara Region, Telecommunications, What's Next? (WILD CARD) | Comments

No Magic Bullet for Emerging Markets

Thursday, August 7th, 2008

My trip to W. Africa is winding down. What an interesting time to be in the region–multinationals are quickly entering the red hot telecom field–the last growth frontier in the industry.  These new players are looking to hit the ground running. One thing is certain: consumers here will be exposed to a broad array of new services and enticements. Consumer demands will grow–radically–and power will shift to the consumer as it has in more other hypercompetitive markets.

How should businesses respond? We see exciting opportunities for companies to leapfrog the traditional approaches that firms in developed markets have struggled with in the past.  Firms that make the most of their business intelligence and continually seek out new ways to gain new insights about their performance and their customers should have the upper hand.

There’s no magic bullet. Ultimately, it boils down to getting the fundamentals right. Simplicity and agility are critical.  But companies that tighten up their business processes and align their people around a clear, customer-focused strategy can gain a serious competitive advantage.

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Posted in Emerging Markets, Sub-Sahara Region, Telecommunications | Comments