Investment by both corporate and equity investors continues to grow in emerging markets in search of growth opportunities. As one might expect, formulating such growth strategy and evaluating new targets of investment, require new skills and knowledge; they also introduce new risks. Our experience with clients has pinpointed three very common strategic errors that executives make, or risks they face, while pursuing growth opportunities in high-growth regions such as Latin America, Asia, and Africa: Homogeneity Risk, Analogous Market Risk, and Absolute Attractiveness Risk.
To understand these risks better, Fuld + Company took a closer look at a consulting engagement we had with a medical devices firm. A case study will demonstrate the seductive power of these three risks and the behavior exhibited by our client executives to realize their errors and refine their investment strategy.