Low-cost business models are a necessity for multinational companies to compete in emerging markets such as India and China,says a report. Global consultancy Boston Consulting Group (BCG) has said that low-cost business strategies are a "necessity" in emerging markets and are even a source of inspiration in mature markets. "Multinational companies cannot avoid having a robust low-cost strategy. Without one,it will be impossible to compete in emerging markets and to prevail over innovative low-cost challengers in developed ones," BCG noted in a recent report. The launch of world's cheapest car Tata Nano and low-priced mobile phones from Nokia,are among the prominent examples of low-cost business models in the Indian market. "Multinationals are disrupting competitors and pioneering new price points and applications in the developed world with low-cost offerings created for Rapidly Developing Economies (RDEs)," BCG said. The report pointed out that low-cost attackers often hit where it hurts,rapidly crippling the economics of more traditional business models. "A low-cost business model is a critical element of any RDE strategy," it added.
