The 86 Percent Solution

The 86 Percent Solution

Adapting business strategies to the specific characteristics of developing countries.

Author(s): Vijay Mahajan, Kamini Banga

Publisher: Wharton School Publishing

Date of publication: 2006

Manageris opinion

While most multinationals concentrate on the 14 percent of the global population living in the developed world, this book points out the fantastic potential of the other 86 percent. However, to succeed in these markets, companies must first try to understand them in greater depth. Specifically, emerging markets differ from wealthier nations in many aspects, and business strategies must be adapted in consequence.
The authors structure their book around nine characteristics that distinguish emerging countries from the developed world, and propose potential strategies for each. Three dimensions merit particular attention:
– To address the problem of adapting products and services to specific local needs, chapter 2, along with chapter 6, underlines the importance of “thinking small,” in terms of unit price, volume and physical size.
– Market access issues are specifically covered in chapters 4 (brand policy) and 9 (distribution practices).
– Issues related to infrastructure and new technologies are discussed in chapters 7 and 8.
Chapter 5 also sheds light on the developing world’s youthful population, an expanding segment and the largest consumer category. Finally, chapters 3 and 10 offer some promising and original suggestions, e.g. utilize possible links between local inhabitants and emigrants, consider partnerships with humanitarian organizations, address growing concerns about the environment, etc.