The industrial and manufacturing industries are the focal point around which other industries function, and it is growing exponentially owing to increasing competition and technological advancements. Moreover, companies in the industrial and manufacturing sector are tapping the opportunities in emerging markets as these economies provide a wide scope for development, expansion, and overall growth. Manufacturing remains a key driver across both economies, but the latter offers profitable expansion opportunities to global industrial and manufacturing firms. The growth opportunities in emerging markets like Asia can be attributed to factors such as the increase in infrastructural spend, surge in customer demands, and development of agriculture and mining sectors among others. By leveraging market intelligence, manufacturing firms can gain in-depth market and customer insights, collaborate with local businesses, garner government support and devise effective market entry strategies for new markets.
For successfully entering niche markets, stakeholders must develop effective market expansion strategies, understand the competitor landscape, and gain a comprehensive view of the current market scenario. The business development executives can leverage market intelligence and business analytics to gain detailed insights and identify growth opportunities. However, organizations undermine the potential of emerging markets and overlook the development opportunities it offers. Why is it essential to expand in emerging markets, you ask? Here’s why.
Why is New Market Expansion Essential?
Industrial and manufacturing firms often face several challenges in existing and domestic markets. The markets where companies currently operate in are troubled with uncertainties such as increasing competitive pressure, uncertain political scenarios, and rising operational costs. The growing competitive pressure often leads to price wars between companies, increased investment to create product differentiation in the market and comply with the stringent regulatory environment, ultimately leading to reduced operating profits and negatively impacting the organization’s bottom line. The increasing political instability such as the recent BREXIT resulted in a high-risk environment for investment opportunities across the globe. Thus, to remain ahead in the market and expand their share of wallet, industrial and manufacturing firms have been compelled to devise new market entry strategies and create profitable expansion strategies to increase their global footprint.
Key Emerging Markets in Asia – China and India
The shift in market dynamics has created a new phase of value creation in terms of demographics, geography, regulatory compliance, and technology. These shifts have coerced companies to embrace change, leverage the growth opportunities in niche markets through new offerings and modern business operating models to achieve sustained value creation. Emerging markets such as China and India hold vast growth opportunities for industrial and manufacturing companies. Why are China and India the promising markets, you ask? Here’s why.
- China has one of the largest domestic market, both in terms of production and consumption. The production and manufacturing bases in China enjoy high productivity at a significantly lower cost, a resultant of its superior manufacturing capacity, large supplier base, increase in adoption of automation technology, and a robust supply chain infrastructure
- Emerging as the new manufacturing hub in Southeast Asia region, India, with its large consumer base, is an untapped market for producers. The country has a large pool of skilled workers and several schemes to develop a multi-modal infrastructure. The government initiatives such as Make in India encourages the country’s manufacturing sector to develop and presents new growth opportunities for manufacturers and industrialists
Apart from these, countries like Singapore, Thailand, Malaysia, Indonesia, Philippines, and Vietnam are among others emerging as a low-cost manufacturing hub in Southeast Asia. The key industries that are expected to grow by leaps and bounds are apparel, footwear, electronics, automobile, machinery, aerospace, pharma, petroleum, textile, agribusiness, and food and beverages among others. In the year 2015, a leading automobile manufacturer announced an investment of more than US $ 150 million to increase its production capacity to cater to the growth in demand.
Market Expansion Strategies for Industrial and Manufacturing Firms
Industrial and manufacturing firms often face a dilemma while understanding the market dynamics and developing an effective strategy for market expansion or market entry. Companies often venture into the unknown without the necessary market intelligence, i.e. without gaining an in-depth knowledge of the market dynamics and the customer demands and needs. For industrial and manufacturing firms, to enter or expand in a new market, they can either grow by developing their manufacturing capacity or by building a robust sales force or distribution network in the region. The various approaches for market entry can either be a greenfield or brownfield expansion, which can be based on market intelligence obtained through a thorough market research of the target region or market.
Industrial and manufacturing firms rely on their internal sources for market insights and industry trends. The organizations internal sources mainly comprise of sales or marketing teams, CI teams, industry bodies and associations, desk research, and other internal sources. However, there are several drawbacks of data obtained through internal sources as they might be incomplete or inaccurate, the assumptions can be difficult to validate, and the unstructured data can lead to vague or incorrect results. Similarly, organizations also rely on external syndicated sources that use generic models and conduct limited primary research that lack industry focused insights and often dwell on limited first-hand information.
The Infiniti Advantage
Our team of senior analysts believe that the current market is inundated with uncertainties across the globe, therefore making it crucial for industrial and manufacturing firms to adopt a market expansion or entry strategy. In doing so, the firms will require market intelligence and customer insights along with significant time and resources to ensure complete success. Infiniti Research provides expert advisory and strategic research services to organizations that help them make informed business decisions. The custom market research solutions by Infiniti Research follow a four-step process to ensure quality actionable insights to support strategic decision making, which are as follows:
Our team of expert analysts provide actionable insights to industrial and manufacturing firms, which enable them to leverage our unrivaled expertise in research and business intelligence services to drive growth opportunities and successfully improve the return on investment (ROI) in various emerging markets such as APAC and MENA among several others.