partner with a local expert or consultant who has an in-depth understanding of the market, and can help you effectively navigate on the ground. Also, build a network of advisors and trade bodies that can support you through the journey. Perhaps you might also want to consider shifting a team member to the emerging country to understand the local situation better, or arrange for periodic travel there to get better acquainted with the conditions on the ground.
2. Proactively Manage and Mitigate Your Risks
A few years ago at MetricStream, we began evaluating the opportunity to enter the Middle Eastern market. Our market research showed that there was a strong need for GRC (governance, risk, and compliance) solutions there. However, there were also some risks. So, we developed a comprehensive risk mitigation strategy. For example, to manage our investment risk, we decided that instead of setting up a local office, we would find strong local partners and support them from our Bangalore office, which was just a 4-hour flight away.
Similarly, to build market credibility, we launched the MetricStream Middle East edition of our GRC Summits. These annual summits bring together the brightest minds from the GRC community across the region for engaging presentations and case studies, networking opportunities, and the sharing of best practices and ideas. I have also made it a point to travel to the Middle East several times a year to help demonstrate our commitment to the market. Today, we have multiple partners and customers in the Middle East, and are also looking to hire local talent to enable us to continue the positive momentum.
The point is this: if you’re looking to enter another market, or if you’re already in one, it’s important to understand, as well as proactively manage and mitigate your risks. One way to do this is by conducting regular risk assessments. Talk to your partners on the ground to review information and identify any emerging risks. Don’t hesitate to ask questions – due diligence and vigilance are essential.
Also, keep communication lines open between your company headquarters and your partners or teams in emerging markets to minimize any misunderstandings or communications gaps in information that could impact risk decision-making.
Lastly, once you’ve identified, understood, and evaluated potential risks, determine those that are critical or high priority. Then implement best practices and controls to mitigate those risks in a timely manner, conduct regular audits on those areas of risk, and quickly address any issues that arise.
3. Be Creative
McKinsey recently published an excerpt from the book Sales Growth that talks about how Vodafone applied some creative thinking in rural India when they realized that it would be too expensive to establish new distributors across hundreds of thousands of villages. They created a two-tier distribution model, under which they chose local retailers to double as distributors and associate distributors – a model which paid off.
The moral of the story here is that you often need to come up with new and creative ways of growing your business and managing the associated risks of entering emerging markets. Innovation and agility are the keys to surviving and thriving.
How else can you get creative with risk management?
- Adapt your risk model and framework to suit local risks, regulations, and cultural norms such as gift-giving, which may not be well-understood in your own operating environment.
- Empower your local team members who have a great understanding of the regional culture to proactively come up with ideas and best practices on how to tackle any potential risks.
- Understand what motivates your local partners or business teams – be it a promotion, recognition, or pay increase – and then link those incentives to risk management. This will help ensure that your partners or employees understand how important it is for them to identify and manage risk.
Conclusion
Entering into an emerging market can be challenging. It takes perseverance, patience, and vigilance when it comes to understanding, managing, and proactively mitigating any of the associated risks. However, the long-term opportunities for your business can be significant and well worth it in terms of reaching new customers, gaining new business partners, and attracting employees that will help you grow and scale your business.
