NEW YORK, N.Y. — Emerging markets offer increasing growth of purchasing power and greater opportunities for establishing market leadership, as long as investors have local expertise and sound operational plans, according to an international survey of senior business executives launched today by global business performance consultancy, McKinney Rogers. The research report, called “Investing in the markets of the future,” encompassed Europe, Africa, Asia Pacific and the U.S. and was designed to identify which markets global business leaders will be investing in over the next year, and what they see as the key components of success when working in emerging markets.
Three quarters (76%) of respondents agreed that emerging markets offer increasing growth of purchasing power compared to the slowing growth of more mature markets with 66% agreeing that they offer greater opportunities for market leadership. Conversely, only 30% of respondents thought emerging markets would be less affected by an economic slowdown than more established markets.
Commenting on the research, Damian McKinney, CEO at McKinney Rogers said, “While interest in emerging markets is nothing new, it certainly seems to have gained even greater momentum in recent months. With the current unprecedented economic climate as it is in the U.S. and Europe, it is no wonder that entrepreneurs are looking for investment potential in less troubled regions.”
In terms of elements essential to success in emerging markets, an overwhelming majority of business leaders questioned (93%) agreed that hiring local management expertise and developing operational plans to overcome challenges such as poor transportation and infrastructure and dealing with red tape were vital. Respondents also agreed that it was key to invest in emerging markets where there is economic and political stability as well as a highly educated workforce.
He added, “There is no doubt that emerging markets can have lucrative business potential, but careful attention to risk and reward has to be paid, as there are some particular hazards that come into play. As the business leaders questioned in this research have astutely observed, due diligence is paramount - it is vital to have a sound operational plan in place. Indeed, we have witnessed a definite increase in clients asking for our help in putting operational plans in place for their emerging market investment strategies, delivered through practical tools and training focused on behaviors, process and performance.”
“The logical first step is to determine which markets are best suited to the company’s products/services. Look at issues such as local demand and competition, customer dynamics and market segmentation. Really take time to explore the market before committing to anything. Although it may seem tempting to speed up the process to steal a march on the competition, jumping in blind is a sure-fire recipe for disaster. Naturally, one of the most important areas to evaluate is potential risks,” continues McKinney.
Of those questioned eight in ten said they had invested in emerging markets in the last 12 months and 87% intended to do so in the next year. Perhaps unsurprisingly, the BRIC (Brazil, Russia, India, China) markets top the list of investment destinations and it is these that are seen to have the most stable economic and political environments, as well as strong infrastructures and workforce.
“Many of the emerging markets that are coming to the fore have historically been underdeveloped and low-income economies that are now experiencing unprecedented growth. Of course, with this growth, comes a set of challenges, which add a certain element of risk to doing business in these regions. It is those companies that can successfully balance risk and reward that will reap the benefits,” concludes McKinney.
For a copy of the “Investing in the markets of the future” report please email claudia.kellermann@portfoliocomms.com or call +44 (0)02072406959.
About McKinney Rogers:
McKinney Rogers is a global business performance consultancy, with operations in the U.K., Europe, Africa, Asia and the U.S. In partnering with its clients, McKinney Rogers strives to continually add value, by focusing on driving business performance and delivering sustainable growth year on year. Its Business Performance Solutions take business from strategy to execution through the rigor of robust processes and behaviours.
McKinney Rogers works with a number of global clients including Diageo, Pfizer, Wal-Mart and Thomson Financial Services.
Visit McKinney Rogers’ website at www.mckinneyrogers.com .
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