Opportunities presented by emerging economies for global expansion of business
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Added on  2023/01/11
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Emerging economies offer advantageous opportunities for business expansion. This article explores the benefits of expanding into emerging economies, such as the development of a consumer class, innovation, and unrestricted growth. Examples from companies like Gillette and Nestle are provided to illustrate successful strategies.
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TABLE OF CONTENTS MAIN BODY..................................................................................................................................3 Opportunities presented by emerging economies for global expansion of business...................3 REFERENCES................................................................................................................................5
MAIN BODY Opportunities presented by emerging economies for global expansion of business Emerging economies are those economies that are not yet developed but provide an advantageous opportunity for the growth and advancement of the economy. The economies who have recently developed quickly and the market of such economies is volatile thus making these economies as emerging rather than developed. In such economies, the expansion opportunities are very high where businesses can easily earn huge profits by correct expansion and marketing strategies (Singh and et.al., 2018). The cheaper set up and capital cost specifically in form of labour and huge market segment that can be targeted are the key benefits of opportunities that businesses can utilize while expanding on global upfront. Many companies have utilized these advantagesbyintegratingtheirexpansionwithsuchmergingeconomies.Thedifferent opportunities that are presented by such emerging economies can be categories as follows: ï‚·Development of a consumer class: Due to the fact that the consumers have just emerged out of poverty and now have a considerable income to spend, they thrive for trying new products that cater to their different needs. A company, by offering correct product and using exemplary strategies can capture these markets very easily. For instance, the example of Gillette can be taken into consideration because of their expansion in Indian economy that is one of the fastest and rapidly emerging economies (Dominguez and Mayrhofer, 2017). They launched a special Gillette guard razor for Indian men that was cheap, provided safety and made shaving easier. They did this after observing Indian men and identifying that they were more cautious about their safety rather than the close shave which is preferred by Western men. ï‚·Innovation: Another major opportunity is innovation where the emerging economies, because of their cheaply available resources and the cheaper labour costs as well, help in developing innovative products at a lower cost. This can be understood from the example of Nestle, who for better integration in the Chinese market launched ready to make herbal soup for them. They observed that Chinese were becoming extremely health conscious and they did not have adequate time to prepare herbal soups, teas and drinks (Li, Cui and Lu, 2018). Additionally it was also identified that the herbal pills were not preferred by them because of their cultural perceptions. Therefore, Nestle successfully launched the 3
herbal soup so that the time could be saved and the market preference for their product was also high. ï‚·Unrestricted growth: Since the market is already growing, the best thing that a company can do is to study the cultural preferences, identify the local market and analyze the expectations of the public of that particular economy. This can tremendously help the companies in launching their products successfully in such emerging economies. Again, the example of Mc Donald's can be taken while it was emerging in Indian economy. They identified that the people of India do not like light flavors but prefer strong and spicy food (Engelkenn and et.al., 2016). Therefore, the modified their recipe of burger and additionally removed the beef option when it was identified that cow was treated as a sign of worship in India. This led to the immense success of their products and made the company outlets an extremely preferable eating option. Therefore, it can be said that there are various opportunities that are presented by the emerging economies and of tapped correctly; they can contribute significantly in the revenue generation of the company. 4
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REFERENCES Books and Journals Dominguez, N. and Mayrhofer, U., 2017. Internationalization stages of traditional SMEs: Increasing, decreasing and re-increasing commitment to foreign markets.International Business Review.26(6). pp.1051-1063. Engelken, M., and et.al., 2016. Comparing drivers, barriers, and opportunities of business models for renewable energies: A review.Renewable and Sustainable Energy Reviews.60. pp.795-809. Li, M.H., Cui, L. and Lu, J., 2018. Varieties in state capitalism: Outward FDI strategies of central and local state-owned enterprises from emerging economy countries. InState- owned multinationals(pp. 175-210). Palgrave Macmillan, Cham. Singh, D., and et.al., 2018. Corporate expansion during pro-market reforms in emerging markets: Thecontingentvalueofgroupaffiliationanddiversification.JournalofBusiness Research.82. pp.220-229. 5