When a developing nation’s economy starts to flourish and become more involved in the global market, it is defined as an emerging economy. As countries expand economically, both corporate and family businesses are able to tap into a whole new market of people who live within an emerging economy. This presents amazing opportunities for investments and partnerships as well as massive growth potential.
Emerging economies can be spotted by looking for geographical areas with significant technological advancements, fast economic growth, and rapid industrialization and urbanization.
Top emerging economies are located in India, Mexico, Russia, Pakistan, Saudi Arabia, China, and Brazil–countries with a combined population of over 3.5 billion. This number alone suggests a tremendous opportunity for development and generational wealth production.
Challenges and Risks
While there are many benefits to operating your family business in an emerging economy, it also comes with risks. Emerging economies are often uncharted territory and businesses need to be able to navigate ever-changing systems and environments.
Some risks that come with an emerging economy are out of the business’ control, such as political instability, interest rates, and inflation. Others are internal to the business, like a weak infrastructure.
Conducting research and evaluating the strength of your business and its systems can help give you an idea of whether it is capable of entering an emerging economy or not. Despite not knowing what is ahead, many businesses have succeeded in emerging economies by having strong systems and an eagerness to confront challenges.
Strategies for Success
Although there are potential challenges and risks of operating in an emerging economy, it can also offer an abundance of opportunities for multi-generational family businesses.
Here are three strategies for success:
1. Adaptation
Since a business operating in an emerging economy is focused on an untapped market, the ability to adapt marketing, products, and services to fit the needs of a new space is essential.
For example, if you own a restaurant and decide to enter into an emerging economy, you’ll need to look at local food preferences to see what people are interested in buying. You may change your menu slightly or offer alternative dishes to help attract customers and get your foot in the door.
If you want to stand out in a competitive economy, instill an adjustable approach to your business model and be willing to modify it to fit the needs of the new market.
2. Flexibility
By nature, emerging economies are often prone to unpredictable shifts or unexpected challenges. If a company can be malleable and willing to improve and adjust as needed, it will be much more successful in developing.
Uber is an excellent example of being flexible in an emerging economy. They were introduced in India in 2013 and quickly realized they needed to make changes in order to succeed. In most countries, people pay for an Uber using a credit card, but in India, most people rely on cash. Uber recognized this discrepancy and introduced cash payments so that it was easier for people to use their service.
Being open to new ways of conducting business and thinking malleably can help you seamlessly weave into a new economy.
3. Innovation
New ideas and new strategies set companies apart from competitors. Family businesses can gain traction by acting as disruptors in emerging economies.
Chobani was just a small, family-owned business until it took advantage of opportunities in an emerging economy. They focused on a product that was relatively unknown, Greek yogurt, and positioned themselves as a company that only uses high-quality and natural ingredients.
This led Chobani to be the booming business that it is today — known as one of the top yogurt brands in the United States. The ability to be creative and innovative within your business can change everything about its longevity and ultimately, its success.
It’s Your Turn
According to a global survey, more than 50% of family businesses plan to expand their operations into emerging markets in the next five years.
It may seem daunting to take on this task, but you don’t have to take the next step alone. Contact Positively People today so we can help you tap into an emerging opportunity and ensure your family business becomes a legacy that will benefit your family for generations to come.
