The best way to select emerging markets to exploit is to evaluate their size or growth potential, right? Not according to Krishna Palepu and Tarun Khanna. In Winning in Emerging Markets, these leading scholars on the subject present a decidedly different framework for making this crucial choice. The authors argue that the primary exploitable characteristic of emerging markets is the lack of institutions (credit-card systems, intellectual-property adjudication, data research firms) that facilitate efficient business operations. While such "institutional voids" present challenges, they also provide major opportunities-for multinationals and local contenders. Palepu and Khanna provide a playbook for assessing emerging markets' potential and for crafting strategies for succeeding in those markets. They explain how to: Spot institutional voids in developing economies, including in product, labor, and capital markets, as well as social and political systems. Identify opportunities to fill those voids; for example, by building or improving market institutions yourself. Exploit those opportunities through a rigorous five-phase process, including studying the market over time and acquiring new capabilities. Packed with vivid examples and practical toolkits, Winning in Emerging Markets is a crucial resource for any company seeking to define and execute business strategy in developing economies.
Krishna G. Palepu is the Ross Graham Walker Professor of Business Administration and Senior Associate Dean for International Development, at the Harvard Business School. Palepu's current research and teaching activities focus on strategy and governance. Palepu has published numerous academic and practitioner-oriented articles and case studies on these issues. In the area of strategy, his recent focus has been on the globalization of emerging markets, particularly India and China, and the resulting opportunities and challenges for western investors and multinationals, and for local companies with global aspirations. Tarun Khanna studies and works with multinational and indigenous companies and investors in emerging markets worldwide. His current research focuses on understanding the drivers of entrepreneurship worldwide. As part of the Emerging Giants project, he seeks to understand how to build world-class companies from emerging markets worldwide. His recent book, Billions of Entrepreneurs: How China and India Are Reshaping Their Futures and Yours, zeros in on China and India, and identifies best practices for local entrepreneurs and multinationals operating in each of these two countries.