Large multinationals see Brazil, Latin America, and Korea as areas of high growth, estimating 5% to 10% growth over the next five years, says Lux Research.
Boston, MA – May 8, 2012 – With startups and established corporations alike scouting for new ways to drive growth into new markets, partnering in order to acquire key capabilities such as local market knowledge, access, networks and government support is the most important factor for formulation and delivery players, according to a Lux Research report.
“Partnerships and alliances are the bread and butter of growing a business, and companies enter into such relationships with three basic goals — boosting immediate revenue, optimizing expenditure, and facilitating long-term growth,” said Yan Xiang Yang, Lux Research Analyst and the lead author of the report titled, “Formulation and Delivery: Key Ingredients for a Right Partnership in Entering Emerging Economies.”
“While developed countries grapple with the aftermath of the 2008 financial crisis and many companies experienced a shrinking of both markets and opportunities, many of the APAC countries not only weathered the recession, but some even managed to grow, making them very attractive as entry targets,” she added.
To gain insight into key considerations and factors that influence the success of partnerships in these economies, Lux Research analysts surveyed 25 players in the formulation and delivery space. Among their findings:
- Local partnerships are seen as vital. All participants, including large multinationals, said they would rather partner with a local company for new market entry than risk going it alone. Local market knowledge (87% rated valuable and above) and local market access (83% rated valuable and above) are the top desirables driving the need to establish a partnership with a local company when entering a new market.
- Country specific strategies formulated to tackle entry challenges. Many have opted for a China strategy such as partnering only with those prepared to share significant IP. Countries such as India, Indonesia and Vietnam with large growing populations but low affluence levels warrant different market penetration tactics.
- Start-ups and corporations have different views on emerging markets. Technology vendors are still focused on China and India, whereas large multinationals are more willing to tech scout for local partners in untraditional markets such as Indonesia and Vietnam.
To learn more on the subject, please register for the complimentary Lux Research webinar, “The Trend is Your Friend; Demographics, Healthcare, and the Paradigm Shift,” on May 15th at 11:00 EDT.
The report, titled “Formulation and Delivery: Key Ingredients for a Right Partnership in Entering Emerging Economies,” is part of the Lux Research Formulation and Delivery Intelligence service.