Profit or Peril: The Double Edge of Emerging Markets

Emerging markets hold enormous potential for multinational companies (MNCs). They promise new customers, fresh growth, and exciting opportunities. But while the rewards can be big, entering these markets isn’t easy—and when companies rush in, the costs can be even bigger.

As global interest in emerging economies has surged, researchers and executives alike have tried to understand what makes these markets tick. Yet one issue often gets overlooked: companies tend to be overly optimistic about how quickly success can come. This misplaced confidence—what we call the “temporal optimism trap”—can derail even the most well-intentioned expansion strategies.

To understand how this happens, we examined GlaxoSmithKline’s (GSK) experience over a decade as it launched and distributed an asthma medication across more than 30 emerging economies. We shared our findings with GSK and later published a case study based on this research.

The company marketed two products: Ventolin Rotacaps, a powdered capsule inhaled through a device, and Ventolin Nebules, a liquid medication administered through a nebulizer. Both were manufactured in Melbourne, Australia, and sent to markets worldwide.

The outcomes couldn’t have been more different. Rotacaps flopped, largely because GSK set unrealistic timelines and underestimated the effort required to establish a reliable distribution network. Nebules, on the other hand, succeeded—thanks to a slower, more flexible approach that adapted to local realities.

When Time Becomes a Trap

Our study revealed a deeper reason behind these contrasting results: different cultures view time in fundamentally different ways.

In developed markets, time is treated like something you can measure, divide, and control—think of deadlines, schedules, and quarterly goals. Managers here often operate by the clock, valuing speed, precision, and short-term milestones. This is known as “clock time.”

In many emerging markets, however, time is viewed more fluidly—as something that unfolds through events and relationships rather than rigid timetables. Managers focus less on deadlines and more on building trust and achieving long-term results. This approach is called “event time.”

When companies from clock-time cultures impose their pace on event-time markets, they risk falling into one or more of the following traps:

1. Temporal Misalignment: Rigid timelines can damage relationships with local partners. GSK’s Australian plant kept ramping up production of Rotacaps, expecting distributors in emerging markets to keep up. But local systems weren’t ready, creating a supply-demand mismatch and straining partnerships.

   
   

2. The Speed Fallacy: Companies often assume that entering many markets quickly will create momentum. GSK made this mistake—rolling out Rotacaps across dozens of countries at once, without accounting for differences in regulations, physician training, or patient education. The rapid rollout only magnified these gaps.

   
   

3. Temporal Myopia: Focusing too much on the near term can blind firms to the long-term nature of market development. GSK’s three-year window for Rotacaps seemed reasonable in developed markets but was far too short for emerging ones, where partners suggested a ten-year horizon. The company evaluated results too soon and gave up before the product could take root.

How to Avoid the Temporal Optimism Trap

The good news: these mistakes are avoidable. Companies can align their timelines more effectively using the T.I.M.E. framework—a practical guide for managing time across cultural and market differences.

T – Tailor Time Expectations to Local Realities

Local partners, regulators, and customers often operate at a different pace. Success requires syncing headquarters’ goals with local conditions.GSK did this well with Nebules, distributing it through established hospitals and clinics that already had capacity and trust in place. Similarly, Starbucks took its time in India, recognizing the dominance of tea culture. Instead of chasing quick profits, it partnered with Tata Global Beverages, expanding city by city while adapting its offerings to Indian tastes.

I – Immerse in Local Time Norms

Understanding how time works locally is key. Companies should spend time learning local rhythms of trust-building and decision-making.GSK’s Nebules team did this by working closely with physicians and patients, aligning the product’s rollout with real-world treatment habits. Starbucks mirrored this approach by sourcing beans locally through Tata Coffee and training Indian baristas—blending global standards with local culture.

M – Model Patience from the Top

Leaders set the tone. When executives show patience and commitment, teams feel empowered to focus on sustainable results instead of chasing quick wins.GSK’s management gave the Nebules team freedom to grow at a steady pace. Similarly, Coca-Cola took a long-term view in Africa, signaling a deep commitment to local communities and prioritizing integration over immediate returns.

E – Embed Flexibility into Systems

Planning and budgeting processes must allow for slower, iterative progress. Overly rigid performance targets can crush local momentum.GSK succeeded with Nebules partly because it used existing production and distribution systems, letting the product evolve organically. Coca-Cola did something similar by expanding at different speeds across African countries—faster in Kenya, slower in Nigeria—depending on market readiness.

The Takeaway

Emerging markets can be gold mines—but only for those who understand that time moves differently there.Speed, while tempting, often leads to shallow success or outright failure. The companies that thrive are those that respect local rhythms, invest in relationships, and

allow time to do its work.

In other words: don’t just manage time—learn to live in it.