Multiple aspects collude together to ensure success when trying for a product or service break through in emerging markets. Here are six sure ways to understand and realize the fruits of your glocalization efforts:

Know your Customers
Emerging markets can be typically segmented into four:

• Global customers: Customers who go for global brands and expect global quality. In emerging markets, since this size is small, it is positioned at the top of the pyramid.
• Local customers expecting global quality: Next level of the pyramid has local customers who aspire for global brands with global quality. This is a growing segment what with customers being well traveled and exposed to global trends, but who are also value conscious. However, price is the entry barrier for this segment and a business that can deliver with all these three adequately addressed is slated for a sure win.
• Local customers expecting quality at par with local standards: A fast growing segment, this is one of the larger bands in the pyramid and therefore a potential one for businesses looking for low hanging fruits.
• Unique local customers: At the bottom of the pyramid, this segment is unique to emerging markets and populous countries with special needs arising out of the prevalent lifestyle in these geographies.

Environment Expertise
Besides the above understanding of customer segments and their needs, it is important for businesses to understand the various stakeholders that play a role in the environment in the country (political, social, economical, tech adoption, etc.,) and evaluate the most workable business model in this country. A local team and empowered leadership or a supplier who is well aware of the nuances of doing business in that country – a choice that businesses will have to make.

Product and Process Engineering
Product and process engineering play a key role as well. Such frugal innovation practices that have demonstrated good results in emerging geographies, can be leveraged for global markets, in which case, glocalization leads to reverse innovation. Frugal engineering results from being close to customers, understanding their requirements and engineering the product based on this knowledge. Process engineering efficiency of a global organization lies in their ability to identify and influence intermediaries that play in the demand and supply chain. These intermediaries could be dealers, distributors, retailers, regulatory agencies, or legal agencies.

Team Composition
A team of passionate, committed and execution oriented people can help an organization to achieve even quite audacious glocalization goals. It may come as a surprise to include execution oriented people in a creative team, which is responsible for innovation in the organization. But the trick is in doing things, to quote the CEO of a Fortune 500 company, and therefore the inclusion of execution oriented people in the innovation team. The team has to be empowered and an environment where there is no fear of failure should be promoted. Once an organization structure is in place, the creative team needs to come up with organization innovations, new process innovations and subsequently engineering innovations, which together lead to product innovation.

The best mix of expertise an organization can have to achieve audacious gloacalization goals is: 20-25% with experience in multiple diverse backgrounds; 50-60% young engineers, who are smart, energetic, with a no fear attitude and go all out to innovate. Passionate people committed towards customers and process and a systematic plan with milestone deadlines are vital to success.

Internal Selling
Success of glocalization is hinged on the internal support for the initiative itself. Internal credibility of teams in the emerging markets, expertise and other organizational factors influence the decision of glocalization and therefore it is important for the geography leadership to strengthen their business case. In such cases, where there could be constraints such as resource expertise, infrastructure, budgets, to mention a few, collaborative innovation could be the way forward to expand in to emerging markets.

Collaborative Innovation
OEMs need to understand customer requirements and then translate them to engineering or product attributes. While the OEMs core teams engage in these, resource constraints crop in exploring glocalization opportunities – be it in terms of bandwidth of teams or the in-house expertise available or in other areas such as testing waters in a new geography. Collaborative innovation with a suitable engineering service provider (ESP) works well to manage such constraints. ESPs on their part, need to develop the knowledge capability in a particular domain, which an OEM doesn’t want or do not have the time to do. That’s where ESPs can fill the gap.

Written by QuEST Global

on 28 Apr 2014