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EMI hosts expert panel on emerging markets

11/01/2011

The new insitute connects its mission with the formidable experience of Johnson's most prestigious alumni and members of its Advisory Council in a presentation for current students


EMI hosts expert panel on emerging markets

Johnson’s Advisory Council hosted an alumni panel discussion on emerging markets for current students, Sept. 30 in Sage Hall. Moderated by Richard Coyle, executive director of EMI, the panel featured Nell Cady-Kruse, BS ’84, MBA ’85, chief risk officer of Singapore-based Standard Chartered Bank, Hernan Saenz, MBA ’98, MIL ’98, managing partner of Bain Dallas, Bain Houston and Bain Mexico and Bob Staley, BS ’57, BME ’58, MBA ’59, senior advisor and retired vice chairman of Emerson Electric Asia-Pacific.  Discussants shared their perspectives on emerging markets as representatives of the banking, consulting and energy industries. 

Panelists' opening remarks revealed a shared understanding that emerging markets, including and beyond the BRIC nations, are becoming a dominant force in international business. Speakers touched upon the challenges and opportunities that must be addressed by international firms seeking to successfully enter these countries.

Although previous thinking has understood these nations primarily as sources of production, the speakers emphasized that the rising consumption potential of these nations, which are home to the next billion middle-income consumers, is a major opportunity for international firms. This opportunity has gained momentum as local production firms have begun shifting toward serving their own populations.

Saenz however, emphasized that international firms seeking to successfully enter these markets must completely redefine their value proposition and production methodologies if they hope to compete against growing local firms. Similarly,  Cady-Kruse also emphasized spoke of the need to fully understand the diversity of a market's governance, size, production capacity and market potential and how this diversity may create a range of international business opportunities depending on local conditions.

In addition to discussing the need for strategic market entry, the speakers also emphasized some of the key challenges faced by these countries as they shift to global prominence and how these challenges will impact market entry by foreign firms. Staley discussed the importance of due diligence and anti-corrupt practices as companies enter countries with weak copyright and contract enforcement infrastructures. Firms must be keenly aware of changes in local political and economic sentiment toward foreign business which can lead to backlash in the forms of (for example) higher taxation and expropriation.
 
In China, these challenges are compounded by the nation's need to transition from an export-led, to a consumption economy without the major debt and workforce disruptions faced by previous nations forced to undergo such a transition. Panelists agreed that  local circumstances, and how they impact foreign investment, is key to addressing these challenges.



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