Managing complex networks in emerging markets: the story of amul

Abstract

Firms that desire to do business in large emerging markets need to develop a new paradigm for looking at opportunities in these markets. The success of many such firms has depended on how well have they formed or managed to become a part of an existing network of suppliers and consumers. These economies are complex and have unique characteristics that range from underdeveloped markets to small and fragmented supplier base. Clearly, traditional business models are not adequate for this environment. Successful firms participate in the development of both these elements of the supply chain. The prize, needless to mention, is significant sales in a large market. In this paper we describe a successful business model using the example of AMUL. AMUL is a dairy cooperative in the western India that has been primarily responsible, through its innovative practices, for India to become the world's largest milk producer. The distinctive features of this paradigm involves managing a large decentralized network of suppliers and producers, simultaneous development of markets and suppliers, lean and efficient supply chain, and breakthrough leadership. This paper draws various lessons from the experiences of AMUL that would be useful to firms contemplating entry into emerging market.