The characteristics of most growth markets require companies to adapt both their go-to-market strategy and their operating model to address the ever-evolving consumer needs and segments within the limits of the country’s institutional voids and culture. Some companies have managed to overcome the Growth Markets’ voids they face by merely tweaking their existing operating model a fraction. However, most companies which are looking for longer term growth in these complex markets are finding that they need to make more far-reaching and bold changes to their operating models to bridge these voids which step away from the structured and efficient capabilities that have made them so successful in the developed markets.
The Growth Markets have several characteristics which are still maturing to the levels we take for granted in the Developed Markets. These 'institutional voids' range from the lack of reliable infrastructure and power, abundant talent and experienced business partners to ambiguous legislation, complex political situations and limited access to finance. Navigating these voids is critical to success in these markets and hence many companies find they need to review and then adapt or reinvent their operating models to overcome these growth markets’ voids.
Given the maturing business environment and evolving consumer segments which characterise the Growth Markets, companies are adopting more ‘flexible operating models’ to ensuring their businesses are able overcome the institutional voids and meet consumer needs profitably. Modifications may include developing short term, flexible business plans with a portfolio of local partners who enjoy more local decisioning powers as well as adopting ‘work around’ processes and data gathering proxies to overcome the technical voids which companies face in these markets. These flexible operating models will also need to address the issues of retaining good talent and navigating good governance and reporting to adhere to global standards whilst being practical in the local environment.