Preparing Business Plans for Emerging Markets

Preparing Business Plans for Emerging Markets
Question 1 – How Firms should modify their Business Models
The base of the pyramid conditions characterizes relatively rural, underserved, informal economy, ineffective, and reduced competition features. Customers living in these conditions experience inefficient livelihoods (Ladd, 2017). Firms serving these areas need to modify their business models to suit the needs of the customers in question. Businesses can play a critical role in offering ready access to products and services to the individuals critically experiencing susceptible and low-income conditions at the base of the pyramid. By incorporating this pyramid into their value chains and concentrating on them as clients, businesses potentially produce sustainable growth impact on the persons involved. In the recent past, most organizations have been defeated attempting to profit by addressing the low-income communities' urgent needs. Thoughtful in their social motives, these organizations had positively undertaken complex projects. They became astonished when insubstantial consumer demand and other challenges like distribution channels kept revenues relatively low and expenses high, requiring the firms to modify their business models to suit their operations in the Bottom of the Pyramid markets (Ladd, 2017). Firms can take different relevant initiatives to alter their business models to succeed within the base of the pyramid and satisfy the customers' needs.
           First and foremost, firms can re-adjust their distribution channels when serving the customers mostly from inaccessible areas. Specifically, there might be a need to reconfigure value chains to reach low-income purchasers (Simanis & Duke, 2014). This can increasingly happen in various efforts, including reducing commodity costs and boosting access to retail outlets in the slum or rural regions, wherever operating expenses are tremendous. Retailers can partner with transportation organizations to deliver products to the clients by using motorcycles and, in most cases, not charging them delivery fees. Most base-of-the-pyramid customers might find it challenging to utilize e-commerce services or lack the appropriate technological tools. Therefore, many ventures might consider ordering and controlling deliveries to these communities. The adopted product distribution channels might integrate some non-traditional mediums. For example, the firms might employ door-to-door salespersons to serve the clients that, in most cases, reside in rural regions or slums, lacking access to vital infrastructure and information regarding products that the firms offer.
           Secondly, businesses can embrace product redesigning. The base-of-the-pyramid consumers need access to affordable products and services that still meet their specific demands. Therefore, though these consumers are purchasing a product version via similar channels as ordinary customers, firms could reinforce the products to realize different needs and improve the general value proposition. The main objective is to capture increased market share with properly redesigned products. Most importantly, the firms involved should not fear adopting new ideas or adding valuable features to the existing products to realize the anticipated demands from consumers. Considering new relevant features that meet unique customer needs might be an added advantage for these firms while exploring the markets created at the pyramid's base (Simanis & Duke, 2014).
           Thirdly, with the urge to penetrate base-of-the-pyramid markets, firms should modify suitable payment and pricing methods. Most companies or enterprises acknowledge that base-of-the-pyramid customers have imbalanced cash flows and inadequate incomes, potentially limiting their purchasing power and access to the commodities on offer. Therefore, modifying the prices, payment methods, and conditions is an approach to continue business with them. It comprises financial technology to promote limitless payments and money transfers for the parties like distributors, suppliers, retailers, and, most importantly, the clients. In some scenarios, cutting costs for financial transactions and online orders can be appropriate. Embracing price reductions in the business model can also be significant.
Question 2 – Considerations when deciding upon the Type of Entry Mode
           Business owners have various entry modes to choose from when entering emerging markets. These modes are joint ventures, greenfield production, strategic alliances, and acquisitions. However, entrepreneurs need to focus on some considerations before deciding on the most suitable entry modes to prioritize or choose and get into the emerging markets. For example, it is essential to consider the emerging market size and its potential for development. The higher possible number of buyers within the specific market dictates the potential total revenue likely to be realized from sales. When the market has low chances of buyers, it means low sales and revenue. Therefore, market size is a critical element to consider when deciding on an entry mode. The second factor is infrastructure, which is also a success determinant in business. There is always a need to adopt well-structured transport and communication networks linking different stakeholders such as distributors, suppliers, producers, and the final consumers. For instance, crucial road channels should link production areas to the last markets. Insufficient infrastructure development or resources can result in unavoidable problems in supply chain control and commodity distribution to the intended final destinations.
           No entity would also ignore the entry barriers. These entail the impedim...