Alternative execution strategies to overcoming institutional voids and institutional distance in BoP markets

[摘要] Emerging markets are a great point of interest to multinational companies seeking to exploitnew opportunities as they realise that catering to the rich domestic markets limits theiropportunities, their potential and competitive advantage. Serving the consumers that are atthe bottom of the economic pyramid (BoP) presents enormous opportunity but it also comeswith its unique set of challenges. These challenges require an alternative business strategy,as companies entering these markets must develop new offerings designed to meet thespecific requirements of servicing the BoP consumer. This report seeks to explore whycompanies operating in South Africa are entering the lower income markets, and willdescribe the challenges encountered both internally and externally, when operating in thesemarkets. Ten interviews at six multinational companies based in South Africa wereconducted to test the research propositions derived from the literature. The resultsconcluded that companies enter the BoP markets in pursuit of growth. A variety ofsecondary factors also emerged. The data revealed that these companies have createdinnovative alternative execution strategies to overcome the challenges encountered in thismarket. The report offered a descriptive model of why companies enter the BoP market, andhighlights how the challenges presented by the institutional voids and institutional distancewere overcome.

[发布机构] University of Pretoria