What Emerging Markets Teach Us About Strategy: Three Key Lessons

Emerging markets are often framed as difficult environments, defined by instability or weak institutions. But what they reveal is more fundamental: what strategy looks like when firms cannot rely on markets alone. For the past fifteen years, my research and teaching have focused on these contexts, not because they are outliers, but because they are especially revealing. At a time when firms can no longer take the conditions for growth for granted, emerging markets offer particularly sharp lessons in what strategy requires.  

In many emerging markets, the infrastructure that enables business - reliable supply chains, distribution systems, even access to work - is incomplete. In many cases, firms must help create it.  

At Natura, this meant developing ecological sourcing systems in the Amazon while building a vast direct-sales network composed largely of women excluded from formal employment. These investments created economic and social value, but they also built the conditions that allowed the firm to operate and scale.  

As supply chains fragment, industrial policy returns, and sustainability becomes politically contested; this challenge is no longer peripheral. Strategy increasingly means shaping the institutional context in which markets function.

2. Strategy depends on aligning internal capabilities with external stakeholders 

Where markets and public services fall short, firms rarely act alone. But success depends on how well they align what happens inside the organization with the demands of external partners.  

At North Star Alliance, which delivers healthcare to long-distance truck drivers and sex workers across sub-Saharan Africa, impact depends not only on partner choice but on how relationships are configured.  

In some models, regional hubs support local clinics in managing donor relationships. In others, local teams integrate more heterogeneous stakeholders directly. In both cases, success depends on aligning internal structures and capabilities with the realities of the external ecosystem.

3. Strategy requires anticipating shifts in legitimacy and trust 

Institutional change can quickly revalue relationships. During Brazil’s Operation Car Wash scandal, investors penalized firms with political ties while rewarding those connected to NGOs.

In India, the 2013 CSR mandate similarly increased the strategic value of NGO partnerships, helping leading firms diversify their project portfolios. But such ties are not easily improvised: firms starting from scratch often struggle to build credible collaborations. The lesson is not only to form relationships, but to invest in them before circumstances shift.

These dynamics are also visible in practice. In a recent class session at HEC, Inayara de Oliveira, Government Relations Specialist at Mercado Livre Brazil, illustrated how government relations (GR) can help translate between corporate priorities and the expectations of governments, regulators, and communities — what she calls “corporate-public bilingualism.” Her examples highlighted the importance of on-the-ground presence in navigating regulatory environments at the municipal and state levels, and of building technical dialogue with public authorities in ways that benefit both companies and the broader ecosystems they operate in. As she put it, “GR, especially at the municipal and state levels, can't be done over calls. It requires on-the-ground presence, a sharp read of the local context, and building trust face-to-face.”

Emerging markets do not simply present more risk. They make visible something more general: firms are not only market actors. They are builders of institutions, integrators of internal and external worlds, and participants in evolving sociopolitical systems. As geopolitical uncertainty becomes a defining feature of the global economy, those are no longer specialized capabilities. They are at the core of what strategy requires today.