Connecting back to my last post, The Power of Planning for
Allies, Opponents, and Indifference, about developing a socio-political
strategy for my venture. Tarun Khanna, Krishna G. Palepu, and Jayant Sinha’s
article, Strategies that Fit Emerging
Markets, adds another layer of understanding to the development of my
venture. While the authors focus on emerging markets, they do a great job at
connecting many of their lessons to the developing world at large.
Understanding my venture’s “fit” is the next step to my socio-political
strategy. Fit does not simply mean
appropriate for geographical location. Fit means does my venture align with the
political and social systems, openness, product markets, and labor markets[i] of
my geographic location of choice.
Political and social systems, refers to how is power
distributed among the central, state, and city governments; the laws that
protect private property rights; and the independence of the judiciary system
from corruption. By exploring the political and social systems, the political geographic
climates and to what degree is corruption prevalent can be better understood.
Both political climate and corruption have the ability to hamper venture
growth, impact, and profitability.
Openness refers to restrictions the government place on foreign
investment and how cumbersome the procedure for launching a venture is. These
two areas have the potential to restrict the types of funding used to create a
local presence and also delays venture launching. Through diagnosing openness I am able to
decide if a geographic partnership is the best way to launch my venture, based
on funding restrictions and potential delays. When working in developing
countries obtaining reliable consumer data can be challenging and
transportation infrastructure conditions can be poor, all of which can further
inhibit a venture from being context appropriate and with reliable
transportation networks. Therefore it is important to conduct a product markets
analysis.
As I am exploring setting up shop in a developing country it
is important that I gain an understanding of how strong a country’s educational
institutions are, and if people do business in English. The strength of
educational institutions indicates the type of training the labor force has
received, and understanding if business is done in English, helps when
navigating negotiations with opponents and needed indifferents.
I plan to conduct an analysis of what my venture plans to
offer and not offer to its target market. Once this is completed I will combine
all three strategies (allies, opponents, and needed indifferents; Fit analysis;
and venture offerings analysis) to develop a comprehensive socio-political
strategic plan. Please stay tuned and comment if there is something in my post
that sticks out to you.
[i] “Strategies That Fit Emerging Markets” by Tarun Khanna, Krishna
Palepu and Jayant Sinha (HBS R0506C)
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