Companies entering emerging markets are faced with special challenges. Partnering with an established player in such markets can be a viable option. This case study demonstrates successful partnering as a market entry strategy based on the example of a new entrant into the ICT Outsourcing Services market in the Kingdom of Saudi Arabia.

“The development of emerging markets was causing the biggest shift in the global economy and power balance of today.” (UN Chronicle Online Edition: Emerging Markets to Take the Lead in World Economy- "The world is not flat but tilting toward emerging markets"). Emerging markets represent high opportunity at a high level of risk. They offer unique challenges and opportunities to both multinational and domestic companies. Generally, emerging markets are characterized by large scale of domestic economic activity; rapid growth; lack of qualified human resources and growing middle classes that are large in absolute size (numbers) but small relative to the overall population. Further more there are domestic companies that know the local culture well and have succeeded traditionally by focusing on domestic, lower income consumers, and foreign-based multinational companies that traditionally have struggled to break into the market and serve the majority of domestic consumers. 

In this environment, both domestic companies and multinationals face the following challenges (University of Southern California, Center for Effective Organizations):

• Do you build in-country operations with a domestic-only focus, international-only focus, or both? What are the structure, process and talent implications of choosing one over the other?
• How can organization structures be built that effectively and flexibly serve the market in its current state of development, and also position the company for success as the economy and middle class grow rapidly? What are the consequences of making the wrong bet?

Market entry strategies for emerging markets 

Coming up with a market entry strategy for an emerging market involves a thorough analysis of potential competitors and possible clients but also has to take into account the peculiarities of the emerging market. There are numerous market entry strategies, each comes with different levels of risk, legal obligation, advantages and disadvantages. The following list is non-exhaustive:

• Greenfield approach;
• Licensing;
• Franchising;
• Partnership;
• Strategic Alliance;
• Joint Venture;
• Merger;
• Acquisition.

Thereof, Partnering is the loosest form among the cooperative forms. As the “cooperation map” (Source: Detecon) below shows, Partnering allows a comparably high brand visibility (as perceived by the customer) as opposed to a non-existing to low asset integration which goes in hand with the highest level of reversibility. 
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