The basic framework of the world's economy is moving on from the G7 (group of seven industrialized nations) to the G 20 (group of the world's 20th largest economies). The G20 summit, which was first held in 2008, is composed of the developed countries/regions, the four BRIC countries (Brazil, Russia, India and China), as well as Argentina, South Africa, Turkey, Mexico, Saudi Arabia, Indonesia, and others, all of which are becoming important players in the global economy.
While Japanese companies have started to recognize the importance of these emerging economies as markets, in many cases, they have yet to decide on which markets, other than BRICs, they should be targeting. One of the chief reasons is that compared to BRICs, especially China, the size of the economies of the countries is very modest and therefore is difficult for them to evaluate.
Nomura Research Institute (NRI) has developed the "SPEC approach" as a framework for evaluating the potential of these emerging markets. SPEC is an acronym of its three evaluation aspects, that is, size, profitability and entry cost.
Based on this framework, the potentiality of non-BRIC emerging economies, that is, post-BRIC emerging markets, was evaluated from the perspective of Japanese companies. The results indicate that the Arabian Gulf countries, Mexico, Indonesia, Turkey and Thailand are the top five promising markets for Japanese companies.
The keys to success in these post-BRIC countries/regions include: (1) the importance of a regional headquarters, especially, the possibility of setting up a base in Turkey for expansion into the Middle East, Africa and Central Asia; (2) measures to deal with increasing incomes of low-income segments; and (3) forming partnerships with leading local enterprises.