Africa is the next 'opportunity'

Mahajan cited the US$10 billion Indian market for fast moving consumer goods, which is expected to double in the next decade and retail sales in China which have increased 15% annually over the last 20 years, reaching $628 billion in 2004.

He said the next big opportunity is Africa which has 900 million people. "Companies simply can't ignore the opportunities here. We are already seeing that companies want to get into Africa. One has to only look at the boom in the cellular industry on the continent. These are the so called poor and destitute of the world, but we are seeing a massive growing consumer base for cellular technology," he argued.

He added that the complexity and distinctive characteristics of developing countries require different market strategies to realise the opportunities.

"You can't capture the opportunities in developing countries with the same strategies used in developed markets. Many developed country firms have had a difficult time - they have launched products and pulled back, changed their branding, or seen their products undermined by local rivals. Therefore, new solutions are needed to tap into these markets," said Mahajan.

He commented that firms from developing countries are themselves the ones well placed to capitalise on the market opportunities.

"In India, Samsung, LG and Hyundai have each notched up sales of about $1billion in the past decade. Companies from the developing world understand from their own experience what it takes to meet the needs of these markets. And importantly, they understand diversity which is critical in many of the fastest growing regions," he said.

Professor Mahajan holds the John P. Harbin Centennial Chair in Business at the McCombs School of Business, The University of Texas at Austin, and is co-author of 'The 86 Percent Solution: How to Succeed in the Biggest Market Opportunity of the Next 50 Years'.