Same is true for India as well.
May 6, at There is no perfect business plan, but the process of planning can provide useful simulation tool, which can help entrepreneur to convert business ideas into reality.
I have worked closely with Italian firms who have ventured into the emerging markets and, hence, I can share my observations based on my experience with western companies. The differences are astonishing in emerging markets, and this provides an interesting topic of research for business schools.
It is important for western companies to be present in emerging markets as it gives them new ideas which can be emulated in developed markets. For example, today price sensitivity is not just relevant for emerging markets, but also for customers from developed countries.
So strategies adopted to solve price sensitivity challenge in the developing countries can be put to good use by western companies in developed markets such as Europe, where people are scouting for cost-effective products with economy increasingly becoming topsy-turvy.
There are lots of things that companies from developed countries can learn from emerging economies as the market conditions and consumer preferences are different. This also forces companies to be innovative not just in terms of product, but also with respect to business processes.
This can provide immense help to companies in handling the uncertainty in the new market. It is not just the big companies, but also small and medium scale companies having expertise in niche product categories who are spreading their wings in emerging markets such as China, India, Brazil, etc as these companies know that the future growth is going to come from developing countries.
It is important to understand that in order to grow and survive companies have to be present in emerging markets, which offer high growth prospects.
As the demand for products is growing in the developing and emerging markets, most of western companies follow their customers in these markets.
The company ventured into China as majority of its customers — i. European fashion houses — shifted their focus to China.
And today Almax has more employees in China, than in Italy. Every emerging market is different with their unique challenges. It is essential to hire employees with experience of local market condition. Business plan is written when you launch new product, company, or enter a new market.
Some people say it is useless to prepare business plan, since the plan becomes old the time you finish writing it as market conditions are changing so fast. While this may be true, writing a business plan still helps the entrepreneur to have clarity of the business, to be organized, bring in coherency in the thoughts, etc.
Business plan can be a learning tool to clarify the idea or to present the idea to somebody else may be to potential investors. It is said that value of the business plan is in the understanding about your products, customers, and markets.
It is a learning tool that helps you to understand your strengths and weaknesses, opportunities and threats. The answer to that is you do not have to forecast, you have to simulate.
Hence, business plan should essentially be a learning tool and used for simulation. In addition, one has to be prepared to make changes in it, if required. Plan should be dynamic which can be altered to suit the external environment. In case of Nokia, I think it was unlucky as the technologies in the telecommunication sector changed rapidly with hardly any time for reaction.
The company was not fully prepared for the market which saw the convergence of computing technology with mobile phones. This change was driven by companies from the IT industry.
No wonder today the smart phone market is ruled by companies who were connected to the computer industry, and not by companies who were pure-play mobile manufacturers. Today, tools such as Customer Resources Management, IT technologies, etc required to start new businesses are easily available, but the market has become highly competitive.
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