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Planning for a $30 Trillion Emerging Markets Opportunity

United States President and World War II General Dwight D. Eisenhower once said: “In preparing for battle, I have always found that plans are useless, but planning is indispensable.”

He could be talking to today's business world about emerging markets. In the past two decades, we've heard a lot about emerging markets and the challenges and opportunities associated with them.

Last week, research house Gartner Inc. stepped forward with a relevant report on emerging markets, which it forecasts as a $30 trillion opportunity and names as the primary business growth area in this century. According to Gartner, it's supply chain leaders who will be responsible for the success or failure of business growth in these markets based on the capabilities they put in place.

Rightly so, Gartner believes that organizations with strong demand planning capabilities and segmented supply strategies are better positioned to capitalize on market opportunities, as well as to mitigate risks.

It's no secret that emerging markets offer tremendous opportunities that mature markets no longer can. But opportunity never comes without obstacle, and with these emerging markets come unique characteristics and challenges — characteristics and challenges that will only become more complicated as they flex and twist overtime and as business expands in each region.

“The ability to plan demand better is a tremendous advantage, as accurate demand plans help supply chain leaders align end-to-end supply chains correctly, and forecast predictable outcomes and profitable responses to demand,” said Mike Burkett, research vice president at Gartner, in a statement on the report.

Burkett goes on to state that businesses are positioning to take advantage of the most explosive growth opportunity since the industrial revolution and that, “as business executives look to emerging markets for opportunity, the supply chain organization will be tasked with serving that growth.”

For its report, Gartner surveyed more than 390 CEOs and senior business executives. The survey showed that CEOs recognize the supply chain is vital to opportunity in emerging markets, but that they are split on their view of its readiness.

About half of those surveyed see globalized supply chains as more complex and fragile now, while the other half said supply chains are more resilient than at any time in history. Depending on the specific emerging market and strength of one's supply chain management, both statements could be true.

Whether you “like Ike” or not, his decades-old quote has relevance as businesses' reach becomes ever more global. It is the planning and planning's need for constant re-evaluation — not the plan, itself — that will allow business to prosper through its supply chains, particularly in such as high-flex industry as the electronics industry.

It is having well-tuned electronics supply chains and professionals in place that flex and twist to emerging markets, always planning for the immediate and anticipating what will immediately follow, that will allow successful supply chains to expand business in emerging markets.

Gartner noted that dealing with the risk of uncertainty was commonly seen as daunting by its survey respondents, with the most-cited supply chain challenge in emerging markets being dealing with changing rules. And it's no wonder.

Right now, from where we sit in the summer of 2013, demand in emerging markets can be described as fragmented at its best, requiring infrastructure support for both physical product and information flows. With lower quality transportation, limited technology, and inconsistent local supply capabilities, these markets are unnerving to enter, let alone prosper in.

Toss in cultural and political differences, and taking advantage of the $30 trillion opportunity is a risky task, even with the best supply chain management at your defense.

But there's also another quote I'm fond of by Mike Tyson: “Everybody has a plan until they get punched in the face.” The trick to emerging markets, as in boxing, is to keep moving. Always be revising based on market changes that will surely occur, undoubtedly at faster rates than we expect; always be planning and never set a plan in stone.

Continual planning as these emerging markets evolve through supply chain tactics is the best defense and best way to success.

What are your thoughts on planning for supply chain management in emerging markets? Tell us below.

17 comments on “Planning for a $30 Trillion Emerging Markets Opportunity

  1. elctrnx_lyf
    July 25, 2013

    If 30 trillion mentioned in title, it would attract many more readers. Anycase the 30 trillion opportunity is really the value of the market in emerging countries. But who will eat the bigger pie of this will only be known in the next 5 to 7 years. The companies have to evaluate their plan every three months basically to continuosly evaluate as per dynamic conditions of these countries.

  2. Suzanne.Deffree
    July 25, 2013

    Good eye, elctrnx_lyf. We've fixed the headline. And good thoughts. Re-evaluation every three months may even prove to be too little. At the quickening rates these countries and the global business environment are changing and evolving, evaluations may be needed every six weeks.

  3. Mr. Roques
    July 25, 2013

    Well, what president Eisenhower said can't be any more true. It reminds me of a time when I worked for the private sector. The telecom company was being baught by another and they were planning to change technology. We spent days and days planning… but didn't stop until we had a plan. By that time, it was too late. We should had planned parts of it and start working. 

  4. _hm
    July 25, 2013

    It will be interesting to know, currently how much does emerging market spends per year? What will be growth after five and ten years from now?

    And how many years will it need to spend $30 trillion?

     

  5. Lavender
    July 25, 2013

    Opportunities abound in emerging markets. With developed regions increasingly maturing, emerging markets such as China, India, Africa and Brazil brings hope to LED products, mobile devices. It seems that start from now, manufacturers have begun to pay more attention to emerging markets. 

  6. prabhakar_deosthali
    July 26, 2013

    Just to give the glimpse of how fast the emerging markets are embracing the latest in technology –  a recent survey in India shows that the Tablet market grew by a whopping 400% last year (from 0.36 million to 1.9 million) and the smart phone market grew by over 60% ( 9.5 million to more than 15 million) while the PC sales grew by only 1%

     

  7. Himanshugupta
    July 26, 2013

    @Lily, this hope is dependent on the growth that these emerging markets will have in coming years. The growth in BRICS nation has severly affected due to downturn in USA and Europe. For BRICS nation to be self-sustained, it will still take sometime.

  8. Himanshugupta
    July 26, 2013

    @Suzaane, this $30 Trillion opportunity must have a timebound. Is it a 5 yr or 10 yr or more opportunity. So, companies will have to make a long term plan to get as much bigger piece of this opportunity as possible. And given today's market condition and competition i think that any management will not have a easy time.

  9. hash.era
    July 26, 2013

    @Himanshagupta: Yes it's a long term plan for sure. They have a good opportunity if so to make in roads for the future and plan big for the future itself.     

  10. SunitaT
    July 27, 2013

    There are plenty of opportunities for the hopeful and the hardworking. Thus said, there will be risk factors and drastic measures will be taken, but the prizes will console. In order to minimize risk factors one needs to, as the article tells us, “move forward”. With new technology sprouting, it won't be hard to bridge the gap between the production and the sale.

  11. ahdand
    July 27, 2013

    @tirlapur: Yes there is but do you think the market is ready for that kind of number to be catered in the job arena ? I have my doubts still.            

  12. SunitaT
    July 27, 2013

     Yes there is but do you think the market is ready for that kind of number to be catered in the job arena ? 

    @nimantha.d, market may not be ready but then things are certainly looking brighter.

  13. Daniel
    July 27, 2013

    “It will be interesting to know, currently how much does emerging market spends per year? What will be growth after five and ten years from now? And how many years will it need to spend $30 trillion?”

    Hm, tomany questions. As long as consumerization trend is there, it will grow but through different phases like new trends, technologies etc.

  14. hash.era
    July 27, 2013

    @tiralpur: Yes we have to create the need for the market. If we are not ready to make the market change, then you are out of the league.               

  15. SunitaT
    July 31, 2013

    For centuries, the percentage of people in the world with discretionary income (consumers) was intensely smaller than the percentage of people who had just about sufficient for necessities or less. But since the industrial uprising, the percentage of consumers has been rising. And some of the major growth will happen between now and 2025 thanks to the emerging markets

  16. t.alex
    August 8, 2013

    I think “Planning” is the right word for the emerging markets. These will be  different from the current developed ones, with unique needs and demands. We have to carefully plan and time things right. 

  17. Wale Bakare
    August 8, 2013

    I think one needs to look beyond the BRICS to know how markets have been growing. Have you read about ” Smart Rwanda”? This is actually a way of smarting up an entire country. The government of Rwanda has made an ICT framework for all its ministries –  called 10 pillars of Smart Rwanda. This is one in many other African nations that's aggressively adopting ICT and, Smart Rwanda project only would be in region of several $billions.

    http://www.worldbank.org/en/news/feature/2013/07/17/imagining-a-smart-country-Rwanda

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