Skip to Main Content
Access your saved content
The vast majority of multinational companies are looking to high-growth emerging markets as part of their efforts to achieve high performance, particularly given more limited opportunities in developed economies.
Despite the projected increase in consumer buying power in emerging markets, a new Accenture research report reveals that many executives believe the time to build and secure market share is running out. And many do not believe their companies have the strategies and capabilities to succeed.
There is a strong temptation for companies to watch and wait until opportunities become clearer or until the global economic outlook becomes more certain. But with fresh evidence of the diversity of opportunities across high-growth markets, the report concludes that hesitation carries its own risks, as these opportunities are snapped up by more nimble companies.
Original forecasts and analysis, in collaboration with Oxford Economics, of household income in 64 developed and emerging economies, to illustrate the diversity of growth rates over the next decade to 2020, and give a clearer picture of the landscape of opportunity.
Industry consumption curves, in collaboration with Oxford Economics, to demonstrate how changing income patterns influence the consumption of goods and services over time, and how companies can actively influence the development of future markets.
A survey of 588 business leaders across 85 countries and 22 industries, conducted by the Economist Intelligence Unit, on companies’ plans for growth and the capabilities important for success.
Conversations with clients and experts across industries and extensive secondary research, including company case studies and analysis of greenfield and Mergers & Acquisitions investment data.
Read this article in Mandarin
In the current global economic environment, prospects for growth in many markets are patchy and vulnerable. As a result, companies are increasingly turning to high-growth emerging economies to seek new waves of growth.
However, moving into new markets is always challenging, and timing is everything. The Accenture research uncovers a paradox: continued economic volatility may lead businesses to shy away from taking action in the very markets that hold the key to accelerated growth. The longer firms hesitate, the greater the risk of missing out on opportunities, and the more challenging the competitive environment they will face when they eventually take action.
Eighty percent of executives are focused primarily on high-growth markets in emerging economies to provide growth, but 73 percent believe their companies must accelerate their efforts to build market share in these markets or may already be too late to do so.
Forty percent of executives do not believe their companies possess the strategic and operational capabilities to grasp fully the opportunities in emerging economies.
The the total income of emerging-market households is projected to jump by more than $8.5 trillion between 2010 and 2020—almost 60 percent of the total global increase.
Trade volumes between emerging markets (E2E) will, on current trends, overtake those between developed economies (D2D) for the first time by the end of 2013. The economic downturn has accelerated this shift.
There is a great diversity of household income growth trends among emerging markets. For example, today, China has fewer households with annual incomes of more than US$30,000 than many other economies such as Colombia or South Africa. In 2020, Kazakhstan will have more households earning at least US$50,000 than the combined total of many markets including the Philippines, Indonesia, Vietnam, Pakistan and Egypt.
Fifty-seven percent of respondents to our survey acknowledge that they need to “reassess” or “fundamentally rethink” their approaches and capabilities to compete and win in high-growth markets.
"Successful globalizers"—companies with a track record of successful performance in emerging economies, that are confident and committed about their future prospects in these markets—think differently about the capabilities critical for growth, and prioritize investments in strikingly different ways.
The research shows:
High-growth markets are diverse and fast-moving targets. Accurate assessment and forecasting of growth opportunities remains a challenge. In addition, generalized categories, such as BRIC (Brazil, Russia, India and China) can obscure the diverse opportunities elsewhere that could be seized ahead of competitors.
Successful companies adopt unconventional approaches to target markets. To compete against domestic players with strong local knowledge or well-established multinationals, successful companies are investing in more granular and customized analysis to identify consumer segments that may not fall into traditional categories.
Delay bears its own cost. While “wait and see” may be justified if it is based on a realistic assessment of the opportunities and risks, there is a danger that hesitating due to a lack of capabilities or preparedness will result in missing the boat. As the competition snaps up opportunities in high-growth markets, companies need to think differently and prioritize their investments to claim their share.
Tapping into the growth opportunities offered by high-growth emerging markets has become a key lever for high performance. The Accenture research suggests that successful companies in high-growth markets excel in three areas:
Sizing the future: The ability to size, time and prioritize demand opportunities around the world accurately. A deep understanding of their target markets allows successful companies to become masters of strategic positioning: to be not only where opportunities are today, but where they will be tomorrow.
Shaping the future: The insights and capabilities to cultivate and protect future demand in high-growth markets. Our research shows that successful globalizers do not simply accept that windows of opportunity are shrinking. Instead, they open new windows of opportunity by discovering new demand and seeding future opportunities.
Seizing the future: Successful companies infuse their organizations with the strategic, operational and cultural agility to grasp new opportunities. To achieve this, they prioritize and invest in distinctive capabilities that boost operational agility and flexibility.
Contact us to find out how we can maximize your potential in high-growth emerging markets.
January 25, 2012
Skip Footer Links