Essays on New Business Models in Emerging Markets by Eyring Johnson and Nair Article

Download free paperFile format: .doc, available for editing

The paper “ New Business Models in Emerging Markets by Eyring Johnson and Nair” is an exciting variant of the article on marketing. The business environment is changing, and numerous companies are targeting emerging markets. The leaders are the Western companies aiming to penetrate the emerging markets but employ effective business models. The assumption of Western companies is to create cheap products and sell small portions to reflect the cost requirements. In New Business Models in Emerging Markets, Eyring Johnson and Nair (2011) provides advice on strategies to align the business model with customer expectations.

The authors present important information, which well customized within an organization, the company's business success. The aim of the paper is to concur with Eyring Johnson and Nair (2011) ideas on realigning the business models in emerging markets. Business models employed are poor (ineffective) since Western companies are unable to enter effectively emerging markets. Eyring Johnson and Nair (2011) states that Western companies employ their own successful business models without customizing the model to integrate the requirements of the emerging market. For example, a company such as Walmart is successful in the United States and employed a similar model in Germany.

The model was not successful in Germany because of the ideological and cultural differences (Schneider & Spieth, 2013). It means that understanding the emerging market is important and creating products and services that incorporate the requirements of the market is crucial. Some of the Western countries enter the markets through numerous processes. The Western companies may employ local competence, lower prices, lower cost of labor, and other resources but the same businesses are not profitable because the companies rely on selling in the highest income tiers (Eyring Johnson and Nair, 2011).

The lack of identification of the targeted market and understanding the fundamentals of the market creates challenges in implementing the business model. The requirement is analyzing the market and creating a strategy that reflects the requirements and expectations of the intended market. Thus, appropriate formulation and implementation of a business model are important in penetrating the emerging markets or new markets. Eyring Johnson and Nair (2011) proposes the implementation of three steps in reconceiving the business model, which identify an important unmet job, blueprint a model that is able to accomplish the requirement, and implement and evolve the model through encouraging learning and making appropriate adjustments.

The aim is to ensure the formulated business model addresses the market through adjusting based on the customer’ s needs (Maglio & Spohrer, 2013). The model starts with the identification of customer requirements and creating a framework in which these needs and expectations can be fulfilled. Identification of unmet requirements and formulating and implementing a business model to address these requirements is the beginning of an effective market penetration strategy.

Eyring Johnson and Nair (2011) present the example of the Indian market that required a fridge but consumers were unable to acquire the fridge because of operational requirements and purchase cost. The management proposed the solution was to develop a new product that addresses these missing requirements. Therefore, the solution is analyzing the existing demand and customize a product to accomplish the requirements of dissatisfaction (Wilson & Post, 2013). For example, the opportunities exist in the middle market segment since companies target the high-end market and low-end markets but forget the requirements of the middle-level consumers.

Hence, developing a product and service that targets the middle segment of the market offers opportunities. In developing the business model, Eyring Johnson and Nair (2011) states that the customer value proposition should solve an issue more affordable, accessible, simply, and effectively than the alternatives. Market access is important for an effective business model since it determines whether the customers can acquire the product and easiness of use of the product. Eyring Johnson and Nair (2011) presents the example of M-Pesa in Kenya, which is easily accessible and easy to use.

The aim is to balance the value of product against the available resources such as infrastructure. Studying the business environment and developing a business model that reflects such a market is crucial in ensuring the business becomes successful. Market research and market study avail a company with market information and aids in the formulation and implementation of the strategy (Chaurey et al. 2012). Eyring Johnson and Nair (2011) advises on the importance of product-development advice that is obtained through engaging with the customers rather than employing the observational strategy.

The aim is to encourage collaboration and develop the product through the lenses of the customers (Boons & Lü deke-Freund, 2013). The customer utilizes the products and services meaning customization of these offerings from the perspective of the customers is important. The creation of a business model should integrate different processes and components. In creating an effective business model, Eyring Johnson and Nair (2011) proposes the integration of four parts: resources, key processes, profit formula, and customer value proposition: a framework called “ Building a new model. ” Effective implementation of these four parts creates a competitive advantage for the company.

The success of a business model is to create a competitive advantage. The competitive advantage can be seen as a “ cash cow” for a company because it contains components and values, which are hard to imitate. Eyring Johnson and Nair (2011) states that the key resources for the business model include partnerships, channels, technology, people, and brand.   The key resources are crucial since it provides the tools and frameworks to develop a product. In customer value preposition, Eyring Johnson and Nair (2011) presents factors such as access options, type of offering, payment scheme, and pricing as some of the measures to implement a successful business model.

The profit formula determines the amount of income and other financial requirements. Eyring Johnson and Nair (2011) states that some of the variables include are resource velocity, target unit margin, revenue model, and cost structure. Eyring Johnson and Nair (2011) highlights the key processes include information technology, marketing, human resource manufacturing, research, and development. For example, it is important to change the business model implementation, a factor, which is attributed to starting up establishments.

It requires adjustments to the production processes and supply processes to adhere to the business model. When a decision such as the reduction of costs is targeted, the strategy is to analyze fixed costs and adjust the fixed costs to reflect the changing dynamics. The success of any business model is not only targeting the outcome of the product strategy rather the entire processes utilized in creating and marketing the product and services. The business model should keep adjusting depending on the requirements and expectations of the customers.

The aim is to analyze the customer needs before determining the direction to be undertaken (Lambert & Davidson, 2013). The needs and expectations of consumers keep changing and innovating the business model to reflect the requirements of the customer is crucial. Eyring Johnson and Nair (2011) states that analyzing the business, the needs, the expectations, and the efficiency of the model is important. For example, the aim of a customer is high-quality services but at an affordable price (Boons et al.

2013). Analyzing these requirements and reviewing the market conditions enables an establishment to determine effective processes to satisfy customer needs and expectations. The business model has to contain measures to determine the effectiveness of the process (Onetti et al. 2012). Eyring Johnson and Nair (2011) presents that testing the market based on the developed product through encouraging agile functional expertise is imperative. The business model ‘ learning’ capability is crucial since it informs on the steps and processes, which improves the business preposition and operational requirements (Chesbrough, 2013).

It ensures the weaknesses are critiqued and corrective measures instituted. Product testing also gauges whether the expectations of the business model have been achieved, and alternatives to improve the efficiency of the business plan. In conclusion, Eyring Johnson and Nair (2011) views on adjusting the business model to reflect the requirements of emerging markets present crucial information. The analysis indicates the success of any business or product depends on the unmet needs, and the expectations of the customers. The authors categorically guide in the presentation of frameworks and steps to create a business model that reflects the different requirements of the business environment.

Through the use of numerous successful business models, it is evident customizing the business model to address the requirements of the emerging markets is appropriate. However, the effectiveness of the business model includes incorporating the views of the customers, collaborating with the customers in developing the product and services, and adjusting the business model to integrate strategic and operational requirements.      


Boons, F., & Lüdeke-Freund, F. (2013). Business models for sustainable innovation: state-of-the-art and steps towards a research agenda. Journal of Cleaner Production, 45, 9-19.

Boons, F., Montalvo, C., Quist, J., & Wagner, M. (2013). Sustainable innovation, business models and economic performance: an overview. Journal of Cleaner Production, 45, 1-8.

Chaurey, A., Krithika, P. R., Palit, D., Rakesh, S., & Sovacool, B. K. (2012). New partnerships and business models for facilitating energy access. Energy Policy, 47, 48-55.

Chesbrough, H. (2013). Open business models: How to thrive in the new innovation landscape. Harvard Business Press.

Eyring, M.J., Johnson, M.W. and Nair, H. (2011). New business models in emerging markets. Harvard Business Review, 89(1/2), 88-95.

Lambert, S. C., & Davidson, R. A. (2013). Applications of the business model in studies of enterprise success, innovation, and classification: An analysis of empirical research from 1996 to 2010. European Management Journal, 31(6), 668-681.

Maglio, P. P., & Spohrer, J. (2013). A service science perspective on business model innovation. Industrial Marketing Management, 42(5), 665-670.

Onetti, A., Zucchella, A., Jones, M. V., & McDougall-Covin, P. P. (2012). Internationalization, innovation and entrepreneurship: business models for new technology-based firms. Journal of Management & Governance, 16(3), 337-368.

Schneider, S., & Spieth, P. (2013). Business model innovation: Towards an integrated future research agenda. International Journal of Innovation Management, 17(1), 1340001.

Wilson, F., & Post, J. E. (2013). Business models for people, planet (& profits): exploring the phenomena of social business, a market-based approach to social value creation. Small Business Economics, 40(3), 715-737.

Download free paperFile format: .doc, available for editing
Contact Us