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One of the most celebrated business concepts in recent times is the notion of a flat world. The basic logic of this argument is that with the economies of erstwhile communist and socialist countries including China, India and many Eastern European nations opening up their markets by allowing for foreign competition, the movement of personnel, capital and products across borders has become seamless. Such has been the ease of the movement that the world seems flattened by the lack of any trade or regulatory barriers between countries.

This concept, while seemingly plausible and simple, does not necessarily reflect the reality of the global business landscape. The early phase of globalization involved companies from Western economies transplanting their existing brand strategies into the new markets hoping for success. As the practice of globalization became ever more ubiquitous and the dominant way of doing business for global brands, the notion of a flattened world did not work.

Many Western brands rushing to enter lucrative markets in China and India are being forced to rethink their strategies by taking into consideration not only the cultural differences but also differences in local market conditions and competition.

Indeed, one of the biggest challenges to global brands entering emerging economies has come from local competition. In the early phase of globalization, global brands had uninterrupted growth mainly due to the lack of strong local competition. However, that scenario has gradually changed over the past few years. Globalization has given local companies easy access to financial, human and social capital. As such, they are not only developing their own brand but are also threatening global brands in their domestic markets.

Consider the example of Li Ning, the Chinese athletic brand. While during the early phases the brand received a positive reaction, the threats from Nike, Reebok and Adidas were significant, and that in turn changed the fortunes of Li Ning. However, with the resurgence of Chinese pride and support for the local brand, Li Ning has been consistently gaining market leadership in the lucrative but highly competitive Chinese market.

The Indian automobile industry illustrates a similar case. Most global car brands, including Ford, Honda, Chevrolet, Toyota, Volkswagen and Hyundai, have made huge investments in the Indian market given the huge potential and growing middle class population.

However, the strongest competition has been from two local brands, Maruti and Tata Motors. Both brands not only tap into rising national pride in local brands but are also better equipped at understanding the needs of the population. As such, despite the onslaught of global brands, the two brands have stood their ground in their home market.

This raises important questions for global brands as they seek to re-evaluate their strategies to enter emerging economies with changed competitive rivalries. Is the lure of the global brand gradually decreasing as local brands that tug at local pride rise? What are some of the best strategies that global brands can use? These are some of the most important questions that global brands should answer.

Three important strategic points should be taken into consideration. First, global brands can no longer work under the presumption of a flat world with minimal customizing and glorified global brand allure. They should invest in tailoring their brands to the needs of the local population.

Second, global brands should actively seek to collaborate with local brands instead of competing against them. Such collaboration not only enables the global brands to appeal to a larger audience easily but also facilitates market-specific learning more effectively.

Third, global brands identify and reach out directly to customers to co-create value more pro-actively thereby circumventing the challenge of acceptance in the local markets.

Martin Roll is a global business and brand strategist. His Web site is www.martinroll.com.