Posts Tagged ‘Emerging Markets ’

The Revolution Is Being Televised

Tuesday, August 7th, 2012

Africa has arrived

Have you noticed the recent uptick in media coverage on “Africa Rising”? It seems like every week, another column is published mentioning that six of the ten fastest growing economies are in the Sub-Sahara. And, thanks to The AtlanticThe Economist, and BBC specials, Africa’s mobile revolution is now an icebreaker at cocktail receptions; Africa has arrived.

Despite how fashionable Africa has become in some circles, misconceptions abut the Sub-Sahara abound. The degree to which well-traveled Westerners underestimate Africa’s ethnic, cultural and topographic diversity is stunning.

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The Great Expectations Game

Sunday, June 3rd, 2012

Place your bets

Amid this summer’s bumper crop of books on global economics, one title is generating exceptional buzz, and deservedly so.

The book is Breakout Nations: In Pursuit of the Next Economic Miracles, by Ruchir Sharma, who leads Morgan Stanley’s emerging markets practice. He’s been a columnist at Newsweek and the Economic Times of India.

At his day job, he places bets on potential winners – a task that was easier in the past than it will be in the future based on his outlook. Traveling regularly to the countries he analyzes, Sharma brings a valuable, on-the-ground view to his work.

Thoughtfully composed, Break Out Nations takes readers on contrarian’s tour of the world where macro forces lift some economies while hindering others.

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Brazil’s Siren Call

Monday, May 21st, 2012

Rio morning

New day in Brazil

A popular joke about Brazil of the ’70’s and ’80’s went: “It’s the country of the future, and it always will be.” Today, Brazilians wryly retell the joke as a reminder of those painful days when inflation reached 80 percent monthly and their country was adrift.

The future has arrived for a growing number of Brazilians. Thanks to soaring commodity prices and a government committed to avoiding the mistakes of the past, the world’s sixth largest economy is on a path toward sustained growth.

Brazil now has an investment grade rating given only to stable, growing economies. Many investors and entrepreneurs view the country as the emerging market that’s most likely to succeed. In a recent survey of 1,258 global chief executives, Brazil ranked highest, after China and the USA, in importance to their companies’ growth prospects.

Is the exuberance founded? Do the facts support the sanguine forecasts about Brazil?

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A Tale of Two Economies

Tuesday, November 15th, 2011

Booming São Paulo

The West and the Rest

This is a tale of two economies with interlocking features. One has excess supply; the other has gnawing demand. In the West, economic growth is slowed while emerging markets are busting at the seams. An explosion in the number of urban, middle class consumers and related factors is powering growth in emerging markets.

The World Bank estimates that, on average, emerging nations will grow by 4.7 percent – double that of developed countries — through 2025. That growth isn’t only evident in the so-called BRIC nations, but in Turkey, Indonesia, South Korea, and across the developing world. Some of the fast growing regions are in Sub-Saharan Africa.

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“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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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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Delivering to Emerging Markets

Monday, November 17th, 2008

abu-dhabi2

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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…

“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)

   

More on Serving the BoP

Wednesday, August 20th, 2008

wafricacrop

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…

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.