The Hidden Cost of Rushing into Emerging Markets

Emerging markets are increasingly important for multinational companies (MNCs), but entering these markets can be a difficult and costly experience. As interest in emerging markets grows, so too has research into their unique challenges and opportunities. A critical, yet overlooked, problem is that companies often take an overly optimistic view of how quickly success can be achieved in these complex, unfamiliar environments—a phenomenon we call the temporal optimism trap. We explain how companies can fall into this trap and offer executives practical strategies for avoiding it. We analyzed the experience of GlaxoSmithKline (GSK), a pharmaceutical MNC, with the production and distribution of an asthma medication over a decade; we presented the research to GSK and published a case based on the research. We focused on two products: Ventolin Rotacaps (powdered capsules administered via an inhaler) and Ventolin Nebules (a liquid medication converted into a mist via a nebulizer). Both medicines were manufactured in Melbourne, Australia, and were distributed across over 30 emerging economies. We found that Rotacaps failed due to GSK’s optimistic timelines—setting ambitious goals but underestimating the resources needed for distribution in the emerging markets—leading them into the temporal optimism trap. In contrast, Nebules succeeded because GSK adopted a deliberate and flexible distribution approach, adapting to local conditions and temporal expectations. How MNCs’ Approach to Time Can Become a Trap Our study revealed a deep, underlying issue at play: fundamentally different understandings of time in developed versus emerging markets. In developed markets, time is often seen as something that can be measured and divided into clear steps, like using a clock. Managers focus on meeting deadlines, following schedules, entering the market quickly, and thinking relatively short term. This is called clock time. In emerging markets, time is usually viewed more as a cycle. It’s less about formal scheduling and more about how events unfold naturally. Managers are less likely to work to deadlines or linear plans and are more focused on long-term relationships and results. This is called event time. This misalignment in how time is perceived in developing and developed markets plays out in three distinct ways: Temporal misalignment: The imposition of rigid timelines that undermine relationships with local partners. In the case of Rotacaps, GSK’s plant in Australia ramped up production year after year, expecting local distributors to keep pace. But on the ground, the systems and partnerships needed to move the product forward lagged, creating a disconnect between supply and demand. The speed fallacy: The mistaken belief that rapid entry and scaling create the momentum for success. GSK rolled out Rotacaps in many countries in quick succession, expecting this would translate into growth. However, the company did not properly address key country-specific issues such as physician training, patient education, and regulatory approvals. Speed, rather than creating traction, only amplified these gaps. Temporal myopia: An over-emphasis on the present or near future, which neglects the long-term nature of these projects. GSK allowed a three-year window for Rotacaps to take hold in most emerging markets, while local partners suggested a 10-year horizon as a more realistic time frame. The shorter period, reasonable by developed market standards, led the company to evaluate results too soon and made it harder to sustain the long-term investments needed for wider adoption. How to Avoid the Temporal Optimism Trap We propose four key actions, based on a simple acrostic: T-I-M-E. T – Tailor time expectations to local realities. Recognize that local stakeholders—customers, partners, regulators—often operate on different time horizons. Success depends on executives aligning their expectations with local stakeholders. Nebules gained traction because GSK distributed the product through trusted channels—hospitals, clinics, and pharmacies—that already had the capacity to deliver it effectively. These relationships took time to build, and executives needed to bridge the gap between headquarters’ desired timelines and local realities. Starbucks faced a challenge similar to GSK when entering India. Recognizing the long history of tea culture and the country’s comparatively limited coffee consumption, it avoided chasing quick returns and instead built a joint venture with Tata Global Beverages, expanding steadily city by city while adapting stores and offerings to local tastes. I – Immerse in local time norms. Invest in learning how time is perceived and used in the target market. Engage with local rhythms around trust-building, decision-making, and pace of implementation. GSK’s Nebules benefited from this approach. Local managers spent extended periods with key stakeholders, allowing the product to match the cadence of physicians’ prescribing habits and patients’ treatment routines. Starbucks took a parallel path in India, embedding itself deeply in the local ecosystem. It sourced and roasted beans through the Tata Coffee network and trained local roasters and baristas, blending its global standards with India’s measured, relationship-driven way of doing business. M – Model patience from the top. Lead by example, and visibly embrace a longer-term view. These leadership actions empower teams to prioritize sustainable outcomes over quick wins. GSK’s Nebules was managed without much pressure from headquarters; the company conveyed a long-term orientation, giving local managers the space to roll it out steadily and successfully. Coca-Cola demonstrated a similar philosophy when entering African markets, with senior leaders signaling a lasting commitment to the continent. For example, executives emphasized the company’s desire to become “part of the fabric of communities,” making clear that success would depend on patience and sustained effort rather than short-term gains. E – Embed flexibility into internal systems. Redesign planning, budgeting, and performance metrics to accommodate slower, more iterative progress. Rigid systems can undermine even the most thoughtful local strategies. Nebules benefited because GSK leveraged existing production and distribution capabilities, allowing it to expand organically and adapt to country-specific conditions. A parallel dynamic was evident in Coca Cola’s move into Africa. It varied its expansion speeds across different countries. For example, it moved quickly in Kenya where demand for carbonated drinks mirrors the U.S., but proceeded much more slowly in Nigeria where demand is limited. . . . To succeed in emerging markets, MNCs should avoid the temporal optimism trap. The good news is that it is avoidable. The T-I-M-E framework can help executives build long-term value in environments where patience is not a virtue—it’s a competitive advantage. This isn’t about moving slowly; it’s about moving astutely. Success depends on aligning timing with on-the-ground realities, not the pressures of a distant boardroom.

The Hidden Cost of Rushing into Emerging Markets

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