Untapped: strategies for success in underserved markets

Domestic and international underserved markets represent a multi‐trillion‐dollar opportunity that is largely untapped. They offer the chance both to build significant profits and to meet social needs as well. But recent experience shows there are significant risks as well. The purpose of this paper is to present strategies which can help guide companies through these complex markets, building sustainable advantage and avoiding painful pitfalls.

The paper presents two case studies of companies – Citibank and Manpower – which are successfully selling to and hiring from underserved markets. It also presents five success strategies derived from an analysis of over a hundred similar case studies. It focuses on some of the key differences between underserved markets and mainstream markets, and how to address these differences.

This research on trailblazing companies shows that there are five key strategies for achieving success in these markets: mine and translate local market information; adapt business model to community realities; change internal incentives and challenge cultural assumptions; create partnerships and strategic alliances; and improve the enabling environment. For each, the paper gives specific examples of how companies, including CEMEX, Pathmark, 7‐Eleven, and ABN Amro, are applying the strategy in underserved markets.

Many companies are interested in serving markets at the “bottom of the pyramid”, but relatively little is known about how to do this effectively. This article shows how to sell to, hire from, and purchase from these rapidly growing markets profitably. It also shows how business can help address the pressing social needs created by the coming growth in the populations of underserved markets.