In a recent article in Reuter’s, Michael Dell talked about increasing growth in emerging markets by bypassing their typical phone/web direct-model and selling PC’s in retail stores (dubbed dell.com@retail).

I was talking to Dell’s Asia executives in China last year about job opportunities (this was before Michael Dell returned as CEO).  I brought up the challenges their direct business model had in emerging markets, specifically in China, where PC penetration was still relatively low. I argued that Dell needed to embrace retail more aggressively, and possibly create a hybrid retail/direct-model in order to address the uniqueness of the China market (which has similar characteristics to most emerging markets). There was some resistance to the idea … “Dell’s direct-model is our core differentiator,” I was told.

In most emerging market countries, retail is THE primary way to get products to customers. And typically, due to customs and trade restrictions, local computer makers tend to have the advantage over multinational PC companies. That is changing as emerging market countries like China and India are opening up and dropping trade barriers. In fact, the local PC makers are beginning to suffer as the big guys make greater inroads. Eventually, China and other emerging markets will go the way of mature markets, where the top branded PC makers comprise >80% of PC sales compared to smaller PC makers.  For example, in Brazil, >80% of PC’s are purchased from smaller  PC makers and retailers just a few years ago.  That is now shifting towards multinational companies.

But the real point is that companies must reevaluate all aspects of their approach when trying to grow in emerging markets, including their channel and/or business-model strategy, whether it is the core of their business or not. And disruptive leaders in these companies need to stand up and speak loud to change a status quo that is set deep into their company’s culture.