It isn’t a secret that many aspects of developing countries are unappealing to the global businessperson. Decrepit urban and rural areas, lawlessness, and violence often cause companies to avoid these areas either out of fear for employee safety, logistics, or simply because they can’t find a way to make doing business there profitable. However, the fact still stands that these areas have hundreds of millions of potential customers lacking many goods and services. Additionally, there have been numerous pioneering companies which have had to modify their business strategies in order to adapt to the economic climate of these regions, and have subsequently thrived there. Here are a few of the issues that have arisen in these areas, and tips from successful companies on how they’ve handled them:
Challenges of the market:
-Lack of functioning legal systems makes contracts rarely enforceable.
-Prevalence of theft, vandalism, and physical violence.
-Lack of skilled workers.
-Regional poverty makes finding customers who can afford goods and services difficult.
-Conventional advertising rarely has the means to reach the people in these environments.
-Winning the acceptance of the people in the area amidst religious, cultural, and linguistic diversity.
Tips for succeeding in these markets:
-Identify local entrepreneurs and potential partners who can help your business to get acclimated with the culture and economic climate of the area.
-Approach the business endeavor with the mindset of helping the target community by fostering social and economic good. This mindset will be contagious to the employees, partners, and customers and will maximize cooperation and profitability.
-Be willing to experiment with new business processes. The intricacies of these markets almost necessitate a trial-and-error approach.
-Make your partners feel important. Although one partner may only draw a small profit for your business, by including them in meetings, functions, etc., you help to foster a dedicated, resilient business partnership.
For more on doing business in developing areas, check out the whole story from the Wall Street Journal!