...Is entering emerging markets the best way to increase profits? Definition- emerging markets are economies characterised by low to middle income GDP per head. In this essay I will be discussing the different factors that support and disagrees with the statement with the examples of rolls Royce, ikea Bric countries Yes it is- rolls Royce During the recession but survived mainly through market development as they entered the emerging market of China. Benefited from a strong demand of luxury cars. Market is growing by 36% a year and is on course to be the worlds largest market for premium cars. Strong economic growth, rising consumer incomes and growing middle class Rolls Royce used the strategy of entering an emerging market which was China. This strategy allowed the business to enter a market which was growing by 36% therefore giving them scope to boost up sales. Using ansoff's market development it allowed them to still charge a higher prove for their products therefore not having to cut costs in order to survive which would have damaged their brand image of premium luxury cars. As a result of thud the company's profit margins would still have been at the same level as they have a have a specific target market. Motivational levels may have Lao increased as there was very little job losses within the business. Overall rolls Royce emerging into a new market has provided a huge increase in profit therefore avoiding the recession and enabled their sales to be high. However...
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...Analysis of the emerging market in China Introduction Nowadays, with the financial crisis sweeping the globe, the emerging market is to be concerned by more and more countries. China as one of BRICs country has an impact on economic, trade and political in the world. This paper will talk about the emerging market--China from some economic factors, social factors and political factors, also analysis why China play an important role in the world. And what is the relationship between China and the international environment? Global overview and introduction to China When China awakes, it will shake the world. -- Napoleon Bonaparte The people's republic of China (PRC) which located in east Asia continent, and on the western shore of Pacific Ocean, which is the third largest country with 9,596,960 square kilometres. With the vast land, the land boundary of some 22.800 kilometers also have many neighbor such as Russia, North Korea, Vietnam, Laos, Pakistan, Afghanistan, Nepal, Tajikistan, Mongolia. At the same time, the mainland coastline measures about 18,000 kilometers with a flat topography, and there are many excellent docks and harbours, most of them are ice-free all year round (Jinyan, 2005). Most place of China all belong to the north temperature zone. Clear for seasons which suit for people to habitat. In addition as a big country with a vast territory, the nature...
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...Never has there been a time to invest in emerging markets than now. The recent financial meltdown in the United States and Europe has crippled investments in both the US and Europe and the outlook are not encouraging. While a lot of western countries and domestic companies are struggling to increase their bottom line- a lot of companies in emerging countries are flourishing. Expanding our operations to the rest of the world- emerging markets like India, China and a host of countries in Africa will increase our bottom line by helping us to diversity our investment endeavors and Starting out- our primary focus should be on Sub Sahara African Countries. When the global economic crisis struck, sub-Saharan African countries had just enjoyed a decade of rapid economic growth. In the three years before the crash, output had jumped to 6%, from an average of 5% over the preceding years. Thanks to prudent economic policies in the past- such as Zambia and Tanzania’s modest fiscal deficits to cushion their population from the worst of the global recession. While countries without fiscal space, such as Ghana reduces their deficit despite the global downturn. Before the crisis, private capital flows to Africa were rising faster than anywhere else in the world, helping to finance infrastructure and other development projects. Today, there have been a significant reduction in private aids to African counties but the need for external resource is still endless- most African governments...
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...In 1980, Japan’s industrial innovation over took the United States in the global market for the auto making industry. Soon after, very similar modernization was happening in the emerging market. While China and India were previously used for cheap labor or call centers, now they were coming up with new business models for production and distribution. Multinational companies in the west were investing in this market, building their R&D in developing countries, and hoping that economical and educational growth in the emerging market would help them overcome challenges. Businesses also realized that distributing to the billions of middle class people in developing nations is as beneficial as investing in the western upper class population. There was marketing potential in this region of the world, since the population of intellectuals was growing fast and consumers were getting richer and richer every day. The emerging market improved the design of the products by being smart in innovating the production process. The majority of people in China and India were happy with the new economic situation, since they were now able to use their resources, such as raw materials, in the best way possible to improve the economic situation. However, risk and unpredictability is a huge factor when entering this market. Obstacles include, but are not limited to, pollution, government intervention, laws, regulations, piracy and poverty. Dani Rodrik argues that most nations that benefited from...
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...The main characteristics of emerging markets Ayame Nakagawa Submission Date: 23rd August 2013 ------------------------------------------------- ------------------------------------------------- The Main Characteristics of Emerging Markets It is frequently said that markets are getting bigger and more complicated as globalization is spreading. What are emerging markets? They can be defined as ‘a financial market of a developing country, usually a small market with a short operating history’ (InvestorWords.com, no date). For example, BRICs, such as Brazil, Russia, China, and India are common thoughts of emerging countries. These countries have improved rapidly in terms of GDP, trade and so on. This essay will introduce the four main characteristics of emerging markets. To expand the worldwide market Magnus (2010, cited in Beausang, 2012, p.3) suggests that the GDP at purchasing power parity (PPP), which puts an importance on the related cost of living, is a proper method to explain BRICs’ contribution to the global economy. He implies that when GDP in US dollars is used as comparisons with emerging and advanced countries, it would be invalid because it is included some problematic points like exchange-rate in each country. According to the research by IMF (2001 cited in Beausang, 2012, p.3), GDP in 2001 in terms of PPP, America gave at 22 % of the whole, while BRICs were slightly smaller at 21.4%. However, ten years later, IMF (2011 cited in Beausang, 2012,...
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...Emerging markets represent about 75% of the world's land; they are home for 80% of the global population. Based on classifications of countries used by the International Monetary Fund (IMF) in its World economic outlook (WEO) 150 countries are classified as Emerging Markets and Developing Economies (EMDE)s, including 20 members of G20. Today international companies are looking for new opportunities in emerging markets. More than 20,000 multinationals are operating in emerging economies and expect growth of their operations by 70% in these business areas. China and India represent the biggest potential future growth. However taking these huge opportunities means accepting significant challenges. Businesses entering emerging countries can’t succeed by simply using same business models, same products, prices and services suitable for developed markets. That is why companies have to use different strategy that can be applied to emerging markets. This course on Drivers, Strategies and Business Models For Emerging Markets teaches how to optimize the company’s strategy for emerging market, adapt and modify products and services to the target customers, identify new customers’ segments, and maximize profit on investment in emerging economies. The outcomes of this course are expected to be next: -Understanding of specific characteristics of emerging markets and opportunities and challenges there. -Understanding of finance concepts and strategy of investment in emerging economy. ...
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...CARLSBERG IN EMERGING MARKETS Case study – Essay III References Books Gupta, A.; Wakayama, T.; Rangan, S. (2012) Global Strategies for Emerging Asia; 1.Auflage; San Francisco (2012) Agtmael, A. (2007) The Emerging Markets Century: How a New Breed of World-Class Companies is Overtaking the World; 1.Auflage; New York (2007) Armstrong, G.; Kotler, P.; Saunders, J.; Wong, V. (2011) Marketing – Grundlage des Marketing; 5. Aktualisierte Auflage; München (2011) Arouri, M.; Jawadi, F.; Nguyen, D.(2010) The Dynamics of Emerging Stock Markets: Empirical Assessments and Implications; 1. Auflage; Heidelberg (2010) Bleischwitz, R.; Welfens, P; Zhang, Z..(2011) International Economies of Resource Efficiency.Eco-Innovation Policies for a Green Economy; 1.Auflage; Heidelberg (2011) Burgress, S.; Steenkamp, J. (2006) Marketing renaissance: How research in emerging markets advances marketing science and practice. International Journal of Research in Marketing; 23; p. 337- 356 (2006) Cassia, F.;Magno, F. (2010) Marketing issues for business-to-business firms entering emerging markets: an investigation among Italian companies in Eastern Europe (2010) IV Dawar, N.; Chattopadhyay, A. (2000) Rethinking Marketing Programs for Emerging Markets; Ontario (2000) Homburg, C.; Krohmer, H. (2009) Marketingmanagement. Strategie – Instrumente - Umsetzung – Unternehmensführung; 3. Auflage; Wiesbaden (2009)...
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...STRATEGIES FOR EMERGING MARKETS The class discussion started with the problems faced by the developing countries in the emerging markets and then the strategies to manage guarded globalization were discussed. In this present economic scenario, it is not easy for the companies of developing markets to get an easy hold in emerging markets. They have to face several hurdles and the major is the government and policymakers regulations. Pfizer’s patent problem in India and lowering of drug prices by the Chinese government to make more drugs local signify this. Increased population, rising salaries, modern transportation and communication technologies drove many developing countries towards emerging markets. But after global recession, emerging markets have resented towards guarded globalization. Governments are becoming wary of opening more industries to multinational companies and are concentrating more on protecting local interests. They chose the countries with which they want to do the business, pick the sectors in which they will allow the capital investment and promote state owned companies which they want to. They are being selective. A country’s political scenario has become crucial in deciding with which country they want to trade as financial services, telecommunication, information technology, food sectors have been politicized. At the same time, welcoming foreign investment in few sectors triggers nation-wide protests. In India, allowing FDI in retail was a big issue...
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...Emerging Markets Perspectives - CEO Insights Emerging Markets Perspectives - CEO Insights 1 Convergence & Differentiation What is success in a connected world?* Methodology This report was developed to provide a unique perspective from which to view the successes of companies based in emerging markets. While there are many reports providing valuable insights on how multinationals can expand into emerging markets, very few take a systematic approach towards looking at how emerging-market companies have not only fended off developed-world multinationals, but also found their own ways to expand into foreign markets. In addition to drawing on the insights of PricewaterhouseCoopers partners and associates from every market, we relied on two additional sources: 1. The 11th Annual PwC Global CEO Survey: The authoritative analysis of CEO views on business opportunities and risks of operating in an increasingly connected world. PricewaterhouseCoopers has published the survey for more than a decade, reaching out to more than 1,100 chief executive officers worldwide. The 11th Annual Global CEO Survey was launched in January 2008 at the World Economic Forum’s annual meeting in Davos. The survey data were re-analysed for this report at the country level as well as by contrasting insights from developed versus emerging markets. For the purposes of this report, we define “developed nations” to include 19 economies, including the United States and Canada, 15 in Western Europe, Japan...
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...Table of Contents Introduction …………………………………………………………………….....1 Analysis of the Financial Crisis and Emerging Markets………………………….1 Conclusions………………………………………………………………………..8 List of Tables and Figures…………………………………………………….......9 References……………………………………………………………………......10 Introduction In the last years we all heard about financial crisis, economic crisis or even strong words like recession or depression. The goal of this paper is to define these terms and to analyze the effects that they produce in the economy. Another objective is to understand the emerging markets and compare then with developed economies. The effects of the crisis are different from country to country but also have some similarities at a global level. I. Analysis of the Financial Crisis and Emerging Markets The term financial crisis is used when financial institutions or assets suddenly lose a large part of their value. This can result in a loss of paper wealth and not as a change in the real economy, unless a recession or depression follows which is the case here. So we can say that the recession is the result of the financial crisis that started in U.S in 2008 from the burst of housing bubble and the subprime lending. There are more types of financial crises: banking crises (bank runs – when depositors withdraw their money suddenly. This type of behavior can result in bankruptcy), speculative bubbles and crashes (when...
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...An emerging market is a country that has some characteristics of a developed market, but does not meet standards to be a developed market. This includes countries that may be developed markets in the future or were in the past. Examples of emerging markets are Brazil, Russia, India and China also known as the BRIC countries. A business such as Unilever may want to target these countries because the people living there may be earning more money than they used to so they may be more inclined to buy a more modern or well renowned product, this offers businesses like Unilever more opportunities for growth for example Unsilvers underlying sales in emerging markets rose 2.8% in the first three months of the year, compared with analyst estimates of 2.1%. Unilever say that emerging markets now account for 57% of their total business. Another reason large businesses may want to target emerging markets may be that current domestic markets may be mature or saturated which may encourage companies to increase product life cycle by targeting these emerging markets. However it is sometimes difficult to understand how these emerging markets so they may spend huge amounts of money on research and development to see how these markets work and to put together strategies on how to be successful in these markets. This can be very costly for big businesses and they can potentially suffer if their business plans fail. There is always a risk when targeting these markets as there is never a certainty...
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...Introduction Emerging Markets Most of the Developing countries are known as the emerging markets. They are driving the global economy. Investing in emerging markets is a wise decision as the growth can be witnessed and also have better return on investment for future. It is anticipated that Emerging economies will mature two to three times more rapidly than developed nation like the US, as predicted by International Monetary Fund estimates. Corporate profits incline to grow faster when economic growth is higher. Likewise, US companies have done well in the last 12 months is because of their growth in non-US markets. Emerging markets also prove beneficial to investors as they create diversification as they act differently than developed markets. Emerging Markets Index of Morgan Stanley's consists of Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Israel, Jordan, Poland, Russia, South Africa, Taiwan, Thailand, and Turkey (Forbes). Russia is one of the booming emerging markets in the East. However, Russia is not always an investor favorite as it is a booming market in global oil and gas demand. Russia has tons of both. It is the world's prominent natural gas producer and exporter and has the 8th largest oil reserves in the world. Russia is considered as a bargain for equity, but that is mostly due to country risk. (Forbes) During the recession in 2008, world markets in developed countries crashed but the emerging markets saved the global...
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...2012 Subject matter: How to win in emerging markets: Lessons from Japan written by Shigeki Ichii, Susumu Hattori and David Michael was published in the Harvard Business Review of May 2012. The article is about the fact that big firms like Sony, Toyota and Honda were big exporters to developed countries the last decades. But growth in the developed markets has slowed down in the 21st century. The growth at an average annual year rate is much higher in developing countries like Brazil and India than in developed countries. To prosper now, Japanese companies like Sony and Toyota must win in developing countries, something they’re now failing to do. Most of the Japanese companies moved up from the bottom in the developed countries in contrast to the developing countries where they entered at the top of the consumer pyramid. When they where settled they moved into the middle and low-end segments. In these segments low prices and economies of scale are specific characteristics. The result can be that these Japanese companies fail in the emerging markets of these days. So the Japanese companies have to rethink their strategies and overcome four structural challenges. There are four structural challenges to get a better place in the emerging markets. The first one is distaste for the middle and low-end segments. Most of the companies that are entering emerging markets are also find their spots in these segments of the market. However, the last years Japanese companies...
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...“Emerging Markets: From Copycats to Innovators Introduction Some of us are aware, especially those who are tech geek like I am, that, Tech companies are notorious for copying each other’s products and services, essentially “stealing” ideas. While some consumers get frustrated with companies releasing copycat products, the reality is that this game of one-upmanship results in better services for the consumer. Just to cite a few examples, according to P. Baumgartner (2008). “Don’t knock copy-cat innovation, it fuels the real stuff” at ventureburn.com, “Google wanted a more networking-friendly Facebook, so it created Google+. Apple’s team wanted its own navigation app, so it onced tried Google Maps. Facebook didn’t want to miss out on Snapchat-sized success, so it created Poke”. The bottomline is competition. While companies squable to get to to the top spot, they have to generate fresh, dynamic ideas to get the consumer’s attention. In competition, copying, repackaging, or rebranding, innovating or recreating is part of the game. The good news is that they all wind up, somehow to taking their costs down and subsequently their prices down as well. The winner is that company who have low cost input who could do mass production and move its inventory faster than the other. While companies battle head to head for the top spot, the ultimate winner is watching, waiting for that product of top quality and gives great value to the pocket – the customers like you and me. The...
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...characteristics of emerging markets? In contemporary society, emerging Markets (EM) are increasingly becoming the most important strength that could promote the development of the world economy. Broadly speaking, the term "emerging market" has been used mainly to refer to the developing world in Asia, Africa, and Latin America. (Mody，2004). Narrowly speaking, EM refers to the stock markets of developing countries. The purpose of this article is to further analyze the characteristics of emerging markets, I am going to focus on the broad economic aspect of EM, which refers to some developing countries like Brazil, Russia, India, China. (BRICs). I would like to separate this article into three different parts. In the first part, I discuss the implications of emerging markets and why people choose to invest in them. The second part is the central theme of the article. In this part, I focus on the main characteristics of EM. After examining all the characteristics, I make a conclusion about the whole paper and put forward several suggestions for ways governments and investment companies can cooperate together to make contributions to making the markets more mature. Emerging market countries mainly contain dozens of developing countries, which are widely distributed in Asia, Latin America, and Eastern Europe; especially the BRICs (Brazil, Russia, India, China) Bruner et al (2003) classify the world economy in the following way: developed markets, emerging markets, frontier markets and unclassified...
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