In the last decade, emerging markets have become critical to global retail and consumer goods companies seeking low-cost sources of goods and high-growth sources of revenue. What's more, in the last 18 months the recession has propelled increasing focus on markets like China and India, as CPG growth in some Western markets is anticipated to be sluggish for the foreseeable future. Success in emerging markets requires not only a deep understanding of the consumer market, but also the appropriate organizational structure to support the market-facing strategy.
There is no one-size-fits-all organisation structure, and each market requires some localisation. From highly centralised to regionally managed to decentralised, each structure has its pluses and minuses. Regional offices allow for faster decision-making, but often come with an extra layer of bureaucracy. Centralised structures allow for corporate control but lack agility. In terms of in-country operating models, the best will factor in not only market opportunities, but also local laws, regulations, and potential tax benefits.
Talent retention, training and leadership development are some of the most challenging issues in emerging markets. Finding prospective employees is not always difficult, but finding specialized skills often is. Leading companies are focusing on development opportunities and career advancement – not just salary – and providing opportunities for transferring knowledge by moving people around to spread best practices.
In some cases, there may be little similarity between the cultures of the home and emerging markets countries, but the most successful companies find a way to focus on and communicate core values. Although there are many differences in ethical norms across cultures, defining and articulating a set of global core values that takes into consideration all cultures involved can go a long way to ensuring that stakeholders -- both internal and external -- understand and respect how the company intends to do business.