Despite the commercial potential for a product or service in an emerging market, a proper price strategy is crucial for capturing market share.  Price sensitivity analysis needs to be conducted vis a vis the competition, including the use of discounts, which ultimately affect gross margins as well as profitability.  Regulatory agencies are becoming more adept and sophisticated regarding pricing, particularly in regards to markups and discounts through the distribution chain. Consequently, it is imperative that corporations establish transparent pricing policies along with the formation of a pricing process to ensure robust decision making without increasing the exposure to the company.  In addition, pricing teams should be formed to minimize the specter of adverse cross-border impact from potentially inconsistent approaches used in other markets.

Emerging markets are often more opaque in terms of long-term governmental policies due to constant shifts in their respective political and economic landscape. Unforeseen developments such as currency volatility, embargoes, regional conflicts or protectionist measures could make a corporation's financial projections quickly outdated. Market strategies should constantly incorporate potential upsides/downsides to performance in regards to changes relating to specific macro factors.  As such, corporations are becoming more adept at identifying, quantifying and communicating the impact to their respective stakeholders based on multiple scenarios on a more timely basis.  Development of sensitivity models in regards to modifying financial projections for decision-making purposes is becoming more common.

Corporations are establishing their risk tolerance and leveraging sophisticated models, in conjunction with key stakeholders and senior management.  There is often elevated exposure to the operating effectiveness, financial performance and reputation of corporations in emerging markets, for example due to adverse tax audits, FCPA challenges, policy lapses or possible non-compliance to local regulations.  Quantifying the risk of each market is being performed through the use of models, which are fluid and subject to modifications of key quantitative and qualitative factors.  Appropriate decisions are then made in response to the occurrence of specific incidents that could adversely impact the corporation's performance or reputation.    

Determining the financial and operational resources for emerging markets has often been a very subjective process since the standard value proposition used was "vast commercial potential."  Beyond that premise, though, corporations are now increasingly relying on the availability of market data, research and historical performance in other emerging markets to decide on the appropriate investment levels.  Stakeholders are weighing the potential payback of each emerging market vis a vis internal opportunities and commitments, as a misallocation of resources amongst the emerging markets could result in lower global performance for the corporation.  Conversely, lack of resources in early phases of market entry may lead to a competitive disadvantage in the future.  Corporations are identifying key success metrics that are consistently applied across all markets to make the resource allocation process more transparent.  In addition, governance boards are being established to ensure that allocation decisions are aligned with corporate objectives.        

As emerging markets grow, governments are focusing on expanding health care services while controlling costs.  Corporations are formulating strategies to align with governmental policies in each market, which would assist in the minimization of health care expenses while enabling them to provide quality health care solutions in alignment with their respective corporate mission. For new pharmaceutical products, regulatory agencies are requiring more outcomes-based analysis demonstrating cost savings.  Consequently, one of the competitive advantages for a company is to demonstrate the value proposition of its particular product/service in a budget-constrained environment.