With enterprises continuously looking for favorable sourcing opportunities, procurement's focus has shifted towards high-growth emerging markets such as BRIC (Brazil, Russia, India and China) and MIST (Mexico, Indonesia, South Korea and Turkey).
Establishing a procurement strategy for emerging markets involves a broad set of related inputs that include: evaluating attractiveness of emerging markets over time, current opportunities to capture value, and assessing challenges and risks.
Companies planning to source from emerging markets must understand the market diversity, be more flexible to changes in market dynamics, and leverage every change to realize maximum savings. Companies that try to lock in a low price for the long term, potentially lose out on rapidly changing market dynamics. By adopting a “category management” based approach, developing a nimble organization structure and incorporating flexibility into contracts to react swiftly to any upcoming changes, procurement can ensure success in emerging markets.