The organisational requirements for exploring low-income markets

Abstract

There are commercial imperatives for companies to consider low-income markets for expansion. This research study investigated how firms, who traditionally focused on the upper- and middle-income markets, were adapting to operating in dual markets, an ability termed ‘ambidexterity’. While there is abundant research available on ambidexterity, this construct has not been studied in the context of the low-income market.The primary aim of this study was to explore the tensions that existed for firms exploring the low-income market and how firms went about resolving these tensions. A deductive research approach was followed and 23 managers, representing 14 companies across eight commercial sectors, were interviewed using semi-structured interviews and qualitative research methodology. The data was analysed using content, thematic and narrative analysis techniques.A central finding of this research study was that companies needed committed leaders to help resolve tensions for the firm and create the balance between exploring low-income markets and exploiting the traditional markets. Change management was found to be a critical integration technique to help resolve tensions between the “explore” and “exploit” business units.The outcome of this research adds to the theory base of both low-income markets and ambidexterity. It also provides a decision-making framework for firms who are considering the organisational requirements for the exploration of low-income markets.