Entering BoP markets successfully – behemoth or startup?

Late last week I met a packaging designer based out of Beijing who happened to be in Helsinki on a company visit. He posed an interesting question, from his perspective, that a behemoth multinational could easily address all the various segments in a national market by simply being able to flood the market with products in different price ranges, but what could a startup do?

I turned it around. Is a behemoth more nimble in dealing with the challenges of the unknown BoP demographic or a start up?

Did one need to flood the market with a wide range of products or could one focus on a narrow niche very effectively?

It seems as though the answer boils down to how the challenge of addressing the entry into a new market or launching a startup is addressed – is it by the well known "sling spaghetti on the wall" approach much favoured by Chinese manufacturers or can one narrow one's choices and improve one's ROI by taking a far more user centered approach to strategy and product development. I hesitate to use another cliche here, which is, design thinking.

A behemoth can afford to flood the market – a start up cannot. However, a start up can instead focus on one local geography and launch a prototype – whether a product or a service – and test it with the users directly and use the feedback and observations to tweak and improve their product. Especially if they are able to do so under the radar of the "media, analysts, industry watchers, blogs" etc that behemoths have to constantly deal with.

Ironically, a behemoth has little choice but  to create a hubbub around their new (raw) product or service, particularly if its one which is very different from what they'd done before. A startup in many ways might have an advantage. And furthermore, is this advantage greater in a product?  A service ? Or a technologically enabled solution? 

Where do the Kickstart pump's efforts fall in this continuum of scale, reach and size?

This entry was posted in Bottom of the pyramid/Poverty, Business, Marketing, Mobile platform, pay as you go economy, Strategy. Bookmark the permalink.

One Response to Entering BoP markets successfully – behemoth or startup?

  1. Syamant says:

    There are times when the bigger company has gone ahead with the “entire catalogue” plan and at other times it sets up a smaller lean team that iterates and essentially works in much the same manner that another startup would.
    So the decision may also be about responsiveness to markets or situations.
    Another factor that might need to be considered is the relevance of existing product configurations for the market being considered. Increasingly newer product configurations, formats and have to be visualised and developed.

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