The End of Corporate Imperialism
Published on Oct 7, 2008
When large Western companies rushed to enter emerging markets 20 years ago, they were guided by a narrow and often arrogant perspective. They tended to see countries like China and India simply as targets-vast agglomerations of would-be consumers hungry for modern goods and services. C.K. Prahalad and Kenneth Lieberthal call this view "corporate imperialism," and they show how it has distorted the operating, marketing, and distribution decisions multinationals have made in serving developing countries. In particular, these companies have tended to gear their products and pitches to small segments of relatively affluent buyers-those who, not surprisingly, most resemble the prototypical Western consumer. They have missed, as a result, the very real opportunity to reach much larger markets further down the socioeconomic pyramid. Succeeding in these broader markets requires companies to spend time building a deep and unbiased understanding of the unique characteristics and needs of developing countries and their peoples. But such time i well spent. Not only will it unlock new sources of revenue, it will also force big companies to innovate in ways that will benefit their operations throughout, the world.