Rethinking Conventional Models

Seung Ho Park, Gerardo R. Ungson and Andrew Cosgrove

Chapter 2 in Scaling the Tail: Managing Profitable Growth in Emerging Markets, 2015, pp 10-18 from Palgrave Macmillan

Abstract: Abstract In this chapter, we discuss and appraise conventional entry strategies and their underlying assumptions. Findings from a broad sample of firms (n=105,260 firms operating in the BRIC nations) indicate that firms pursuing high sales growth are less successful than firms focused on profitability. Moreover, firms that started with a high growth strategy were less likely to achieve profitable growth over time compared to firms with the goal of profitability. We review possible reasons why scaling based on the logic of mass consumption for commodities is not effective. We underscore the need to explore fine-grained expectations of middle-class consumers, and argue for profitable growth based on a different type of scaling. Cases highlight the successful experiences of firms operating in China and India.

Keywords: Sales Growth; BRIC Country; Cost Leadership; Institutional Void; Profitable Growth (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-53859-8_2

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DOI: 10.1057/9781137538598_2

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