Emerging Markets : Developing Countries

Include a list of information sources that you used and a brief summary of the information provided.

DQ 1: Summarize the most important benefits and risks associated with diversification into global markets.

Include a list of information sources that you used and a brief summary of the information provided.

Emerging markets are economies that are emerging in developing countries to present a viable business opportunity (Kokemuller, 2015). As developing countries becoming more developed countries, they present opportunities for organizations to develop new business. Emerging markets usually inspires new innovation to present new opportunities for business to arrive.

Looking ahead a few years, it is expected that the emerging markets economies will change the dynamics of the world economy, and of trade patterns and global finance, in profound ways.

One example is that China’s one child policy has forced a generations of young adults to be sole providers for older family members, thus giving them less money to spend (Washington Post, 2015). To protect the market shares for domestic organizations, countries such as China, have attacked foreign multinationals. In one year, as many as thirty multinational organizations were placed under investigation. Thus, more and more multinationals are becoming cautious about their international affairs. In 2013, it was said that “at least 3,000 U.S. companies were victims of data theft and network disruptions” and many state-owned enterprises (SOEs) have gotten access to local contracts and markets which are unavailable to foreign firms (Washington Post, 2015). Due to such failures, companies are working to find the best international business model such as reshoring and localization. Therefore, according to the author of this article, “there’s money to be made for multinationals the world over, but they are going to have to rethink their strategies for making it” (Washington Post,

On the other hand, countries known as the New World, have advanced in this industry breaking paradigms, using marketing strategies that allowed them to gain market share and to weaken its

Over the years the global economy has seen a rise in so called ‘emerging markets’. These are developing economies which have exceeded economic performance in respect to their developing counterparts. These economies are newly industrialized and are on their way to becoming developed economies but have not yet reached that status. The more common and likely heard developing economies consists of BRIC (Brazil, Russia, India, and China) followed by Mexico, South Korea, Turkey, Saudi Arabia, and Indonesia. Developed nations (MEDC) include the westernised countries such as the U.S, the U.K and Japan. In 1999, Dr. Kvint published this definition: "Emerging market country is a society transitioning from a dictatorship to a free-market-oriented-economy, with increasing economic freedom, gradual integration with the Global Marketplace and with other members of the GEM (Global Emerging Market), an expanding middle class, improving standards of living, social stability and tolerance, as well as an increase in cooperation with multilateral institutions" This essay will locate the common characteristics that emerging markets share.

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.

During the changing of world economy, it is increasingly common to hear the term ‘emerging markets’ and from news and report. In the mid-1980s, the term ‘emerging markets’ was created by the World Bank, and has significant influence on the global business world nowadays (Gwynne, Klak and Shaw 2003). To raise investor’s attention to those developing countries, there are numerous characteristics springing up which are given by researches and economists. However, some of those characteristics are contradictory and it is difficult to give a real definition. This essay discusses the main characteristics of ‘emerging markets’ as defined by the World Bank and economists.

Developing nations are filled with hope and aspirations of one day becoming a wealthy, dominating, and influential country. These nations can sometimes be unsafe, difficult to live in, and hard for workers to earn good compensation for their labor. On the other hand, living in a developed nation has many upsides. Developed nations are wealthy, which in turn have good infrastructure, labor and worker laws, and have less crime.

BRICS (Brazil, Russia, India, China and South Africa) and CIVETS (Columbia, Indonesia, Vietnam, Egypt, Turkey, and South Africa) are all examples of some of the emerging markets in the world. BRICS are the world’s largest emerging markets and CIVETS are the second largest emerging markets in the world. Emerging markets are also known as; emerging economies or developing countries. An emerging market is a term used to describe a country that is still developing. It is not yet developed but it is neither underdeveloped, it is in between. These countries have some characteristics that would classify them as developed, but they also have characteristics that would classify them as underdeveloped (not to be confused with ‘undeveloped’).

At the beginning of the 21st century, in the world there are more than 70,000 multinational corporations and 850,000 their branches. The parent companies are located mainly in the developed countries (50,200), the bigger number of branches are the share of developing countries (495,000). About a half of the world industrial production and over 73% of foreign trade are the share of multinational corporations. They control about 80% of patents and licenses for inventions, new technologies and know-how. Under control of multinational corporations, there are separate commodity markets: 90% of the world market of wheat, coffee, corn, forest products, tobacco, jute and iron ore, 85% — the market of copper and bauxites, 80% —

Copycat firms within emerging markets (such as Lenovo, Acer and Tata) can be considered learning firms. Copycats essentially learned how to conduct business from an already successful business model. Their ability to transform learning into a viable business has jettisoned them into positions of power within the world’s economies. Lenovo is currently the leader in PC sales worldwide. Although PC sales in the US continue to decline Lenovo’s ability to capture emerging markets such as China, allows them to continue their profitable growth (Gupta, 2012).

It is crucial to analyse the economy and specific markets due to the significant role it plays on individual businesses. Toyota is an organisation that aims produce excellent quality products and to be the “most respected and admired company.” They also encourage diversity as a part of their company culture and expect employees to abide by their code of ethics. In addition, they follow four core values; “customer first”, “respect for people”, “international focus” and “continuous improvement and innovation”.