This article provides information for the MNEs about the untapped market of middle class people those are not satisfying their basic needs. It generates good return on investments if the companies would be able to understand the unmet needs of the market.
Most MNEs are now looking for growth in emerging market but still unable to enter in the market or fail to generate profits because of lack of understanding about the market. For MNEs Customer Value Proposition are the most valuable tools to reach their goals in emerging markets. Affordability and Access are the two main tools requires in the developing market like India, China and Brazil.
In emerging markets the growing middle class provides lucrative business opportunities for MNEs because it is easier for them to reach those people. The new innovative ideas are required to reach the needs of consumers in the emerging markets and the domestic business models are not enough for MNEs.
As said earlier that the affordability and access are much more comprehensive for MNEs to get growth in emerging markets. Godrej and M-Pesa are two innovative ideas to reach the demand of consumers in the emerging markets. In emerging markets like India and Brazil where the people are not getting electricity all the day the Chhotukool developed by Godrej is the most satisfying needs for consumers.
Four elements of new business models like customer value proposition, the profit formula, key processes and key resources are the most useful for MNEs in emerging market. If they want to compete on price they need to follow it clockwise and if they want to compete on differentiation they need to follow it anti clock wise. Like Godrej provides best example of business model that compete on price basis while the Village laundry services is the same but charge more price compared to Dhobis but provides best services in Metro cities.
In emerging markets like Brazil, India and China MNEs should use innovative business model by keeping domestic model at home. MNEs should understand the perception and behavior of consumers and work with new ideas.
The best way for companies is to understand the demand of the products and their ability to reach the needs of consumers in emerging market. Also companies should understand the consumer behavior and preferences for their products. Finally the innovative business should develop by companies to serve in the market rather than to use the domestic business model in emerging market.