Catalyst Asia Intelligence Briefing -- 28 September 2012

Mission: finding successful business models

As usual, we humbly submit an assortment of opinion, research, and intelligence that has peaked our interest.  The common thread that runs through our selections is the search for successful and sustainable business models in a rapidly evolving region (and world).

Base of the pyramid

At the business model innovation lab we are intensely interested in reaching consumers at the base of the pyramid, in a Mars way—guided by the principles of mutuality, efficiency, responsibility, freedom and quality.  We enjoy the chance to learn from others with similar goals.

  • Two senior leaders from the Acumen fund discus the search for--and meaning of--sustainability in the context of impact investing in Mission, Margin, Mandate: Multiple Paths to Scale.  As social business models continue to migrate from the public and non-profit sectors to the private sector, this article provides timely insights into how such models can grow and survive at a commercial scale.
  • Last year Mars Catalyst investigated microfinance (MFI), and whether this increasingly popular tool might be useful in supporting poor rural farmers, such as those who grow cocoa and coffee.  We learned that what works in MFI can vary from setting to setting based on culture, demographics, and the nature of the economy...but, the "best practice" of lending to groups, rather than individuals, emerged as a common thread across most cases we studied.  Liability Structure in Small-Scale Finance - Evidence from a Natural Experiment is a working paper is from Harvard Business School takes a deep and substantive dive into why this is the case.

Asia | South Korea

This week we turn our attention to South Korea, home of brands such as Samsung and Kia that have grown in prominence over the past decade.

  • Inbound FDI is a bright spot for a South Korean economy that faces a downturn in its premier exports.  However, there are lingering barriers and risks for foreign companies attempting to do business there.  South Korea, in search of a boost is a summary of the good, bad and ugly from the Economist Intelligence Unit.
  • South Korean technology firms have come to the forefront through worldwide exports...but amusement/entertainment technology is also being deployed at home, for the benefit of local consumers.  A South Korean Augmented-Reality Theme Park provides a glimpse at the country’s high-tech challenge to Disneyland.

Globalizations | Technology & Demographics

  • The Future of the Internet--and Everything Else is an "infographic" summary of a conversation on the state of technology and its impact on markets and consumers.  We like this nugget: "More people have smartphones now than have access to running water," as it suggests that mobile technology has more transformative power that remains to be tapped.
  • Though its a few years old by now--so not "new" in that sense--what we like about Woodrow Wilson scholar Martin Walker's paper, The World's New Numbers, is that it challenged three widely-held articles of demographic conventional wisdom.  And in pulling back the curtain to reveal the inner workings of demographic science, Walker covers areas of keen interest to us, such as the cultural impacts of population changes on China, and the growth of the middle class in emerging markets.

Emerging Markets | Startup culture

  • How do you say "emerging market leaders?" BRICs, Asian Tigers, Dragon Economies?  Of course, it depends on the business you are in and your key markets.  Focusing on the tech startup scene, Go East, Young Entrepreneur, adds a new acronym into the mix: VICs—Vietnam, India, and China.  From the perspective of the young entrepreneurs in the article, "China is the gold mine, India is the land of promise, and Vietnam is the frontier."

Food For Thought

  • Lastly, we do NOT like it when a good company hits a rough patch, but we know it is imperative to learn from them.  A generation of business school graduates may have studied P&G's storied innovation model, but today the CPG giant is struggling to bring disruptive new innovations to market--a serious problem when the company's business model relies on consumers paying premium prices for state of the art products.  P&G’s 1,000 PhDs Not Enough to Crank Up New Blockbusters focuses on the management of R&D, but it--perhaps unintentionally--raises questions about the sustainability of P&G's core business model. 

Upcoming events

Walking The Channel Management Tightrope In India (October 09, 2012 11:30 AM SST)

You are invited to join Frontier Strategy Group for the teleconference on Walking the Channel Management Tightrope In India. FSG’s Research Analyst for Asia Pacific, Shishir Sinha, will discuss the strategies used by leading multinationals to successfully expand their businesses beyond the top-tier cities in India while dealing with the country’s unique infrastructural and regulatory issues.  Please reply to this email to arrange access.

Catalyst Asia Briefing -- 5 November 2012

Catalyst Asia Intelligence Briefing -- 6 September 2012