Winning in emerging markets

Strategies That Fit Emerging Markets raised two very important questions for the purpose of my social venture. It outlined how companies exploring a new market, especially in a developing country, are faced with uncertainties such as the power of judiciary and the regulatory system, finding skilled labor, understanding consumer patterns (which may not be well-documented) and raised the question of: How do you spot an institutional void in a market you don’t know too much about? The second question emerges from this and asks: How do you overcome an institutional void?

The reading gave an outline of how to map an institutional context through a “five context framework”. This was very helpful as despite having lived in Pakistan for over 25 years, I have observed things about the country’s institutional context but not documented it for myself which is important to do for a start-up.

With regards to Pakistan’s social and political systems, I realized that power centers are mostly politicians as they are able to get people to do things they want. Given the strong control over economic resources that politicians have, it is important to have support for my venture from the ruling party of the village I wish to work in.

To critically analyse the above observation I read a paper published by the governor of State Bank  of Pakistan on the "Role of Politics in Pakistan's Economy". The author theorized that while the economy has been growing despite political volatility, it still has a long way to go in realizing its potential.

 http://jia.sipa.columbia.edu/role-politics-pakistans-economy-0/

I also realized that understanding my market will be difficult as there is no reliable data which can give me insights on consumer spending in rural Punjab. However, there are several reports showing the increase in demand for education, yet I need to understand how sensitive this is to income so that I may have a financially feasible product.

The reading emphasized the importance of adapting strategies specific to a country’s context which is very important for social ventures. I believe that for my social venture to be successful, engagement with local communities will be crucial, however, if I work with a donor and especially an international donor, it may be hard for them to change their model of providing aid assistance. Therefore, if the need arises I may have to develop a sophisticated need and environment analysis to share with the donor and convince them to adapt strategy rather than transplant from another country.

Doing this exercise helped me understand my target market and region better. While I have a lot more thinking and researching to do before I get to an optimal solution, this reading helped me get focused and think more efficiently.