Strategies from the new emerging market competitors:
There are four strategies that have been employed by EMNCs (emerging multinational corporations).
The first: Acting as a cost leader by leveraging local low-cost human resources to provide low-end products, often starting with private-label brands that gain volume sales in their home market and in other assessable markets as well.
The second: The knowledge leverage-er who draws upon specialized knowledge of customer needs when the conditions are privative and the income is low. The answer is often simple, rugged and inexpensive products that can often find a market elsewhere, eventually. Because TMNCs (triad multinational corporations—firms from Japan, the US or Europe) cannot be prevented from accessing low-cost resources or learning about their markets, it is not clear how sustainable these strategies can be.
The third: The niche customizers, such as India's Godrej that focuses on hair color, soap and household insecticides and targets South Asia and Africa. They take advantage of their cost structure and operations to adapt and customize for small segments that the TMNCs, who instinctively standardize as much as possible, have difficulty reaching. The strategy is to out-localize the TMNCs.
The fourth: The global brand builder with focused innovation to enhance the cost advantage and to develop customer improvements. The key is to have a narrow innovation menu. HTC, for example, focused on smart phones and is now the third leading player. The innovation can also be directed to enhancing the customer experience. Lenovo has a brand essence of "innovation that makes a difference to customers." Innovations like its ultrathin, ultra-small, wide screen Thinkpad notebook and its laptop that boot up 20 seconds faster are examples. The innovation is significant enough to break out of the clutter and be noticed by the customers and the trade.
Akshay Deshpande
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