(PDF) Introduction to Emerging International Markets
Added on 2020-01-06
12 Pages4027 Words70 Views
ESSAY
Emerging market defines economic situation of country which is becoming moreeffective and advanced towards growth as well as industrialization. It has better characteristic tobecome development market. It helps the management of organisations to expand their businessoperations in the international market (Khanna and Palepu, 2013). In addition to this, theeconomic situation of China as well as India are considered as emerging market in the nearfuture time. The present report describes about different kinds of challenges which are faced bythe organization to get internationalized. Further, it also describes the reason because whichfirms organizations want to expand at international level. In addition to this, it representsdifferent recommendations to overcome these kinds of issues. Reasons to expand internationallyThere are many reasons for organizations to expand their business at the global level.Generally, expansion of organization in international market can help to increase its market shareand growth. In addition to this, it can aid the corporations to increase profit as well as revenues indifferent nations. Further, management of enterprises also spread their business to improve thebrand image and goodwill of firm in minds of consumers in the global emerging market(Czinkota and Ronkainen, 2013). Further, expansion of international business provides effectiveopportunity to achieve better competitive advantages in comparison to its competitors. Forexample, by increasing the scope of business in various countries, Microsoft is gaining highermarket share, growth and competitive advantages over others. Challenges faced by organizations for global expansionGenerally, management of enterprises face many issues to expand their businessoperations in different countries. Some of them are described as below: Political ChallengesThere are many political barriers which create complexities for corporations to expandbusiness in various nations. Different factors like taxes, tariffs, political stability as well ascorruption level affect the corporations badly in different emerging economies (Terpstra, Foleyand Sarathy, 2012). For example, political condition of Middle East countries and China are notsuitable for organisations because government of these nations do not provide independence toexpand their business as per the suitability of corporations. In addition to this, these reasons1
create complexities to expand business in these nations. Furthermore, it produces issues todevelop effective international marketing strategies in an appropriate manner.SolutionEconomical challengesEconomical is also an important aspect for corporations to enter in the internationalmarket. There are many economic factors such as Gross domestic products (GDP), Grossnational product (GNP), inflation rate, currency rate and supply and demand of materials whichcreate a huge impact on the corporations to expand its business operations in the emergingeconomies (Xu and Meyer, 2013). For example, economical condition of Nepal as well asPakistan is not appropriate which creates issues to manage their global business activities. Sothese kinds of factors cause problems for the management of corporations to expand theirbusiness due to lower sales and less profits in these areas.Social challengesSocial challenges of different nations generate issues to handle its global operationseffectively. Income level, social status, lifestyle, education, needs as well as requirements ofconsumers are the social aspects which affects the international activities of corporations inemerging countries (Cavusgil and Knight, 2015.). For example, social factors of South Africancountries are not appropriate due to lower education as well as income level of people whichcreate complexities for many organizations to do their business in these areas. In addition to this,they produce complexities for enterprises to earn better profit and increase market share in thesenations. Along with this, premium product selling organisations faces issues to increases its salesin many developing counties due to various social issues. On the other side, culture of Canadaand France are completely different which imposes challenges to know exact needs andrequirements of consumers in the emerging market (Thite, Wilkinson and Shah, 2012). Thisfactor produces problems to manage its operations in the other countries. Technological challenges Technological factors create challenges to expand its business in the emerging market. Inaddition to this, operational efficiency as well as communication facilities like internet istechnological aspect which influences global activities and operations in the international market.(Cuervo‐Cazurra, 2012). For example, on the other hand, China and UAE are not supportivedue to lots of restrictions on the promotional and advertisement activities. In addition to this,2
different social media applications are also banned which create issues for the management ofcorporation to handle its international operations. Along with this, telecommunication facilitiesin India are not appropriate which create barriers for global organisations to expand businessoperations in different emerging markets.Legal challengesLegal factor is the major challenge for management of international organizations indifferent emerging markets. There are many legal factors such as health, safety, employmentpolicies, promotional rights as well as market entry rules and regulations. There are mainregulatory factors which affects the global operations of firms (Verbeke, 2013). For example,legal rules and regulations of India are stricter as compared to other emerging economies. Due tothese reasons, legal factors do not provide flexibility to the organizations for making betterglobal strategies because it increases the expenditure of corporations in international market. Inaddition to this, Wal-Mart is a popular supermarket chain across the world that wants to expandits business in India. Due to legal rules and regulations, corporation faced issues to enter inIndian market (Haufler, 2013). This reason produced complexities for the management of Wal-Mart to expand its business operations in the emerging Indian market. Environmental challengesEnvironment can also be considered as the major issue for international corporations toexpand their business in emerging markets. In addition to this, corporate social responsibility(CSR), charity, organizing social events as well as welfare activities for environment are themain environmental factors which produces impact on global strategies in different countries(Collings, 2014). For example, environmental policies of USA and UK are very strict whichaffects the business operations of corporations. This factor does not support businesscorporations to manage as well as increase its scope of business operations. Furthermore, it alsoincreases the investment cost of these global corporations in emerging countries. Apart from that,to manage its operations in India, enterprises have to spend 2% of profit on welfare activities ofsociety which increases their expenditure in the emerging markets like India (Ramamurti, 2012).Competitive challengesIt is also major challenge for management of global organisations in different emergingglobal market. Generally, organisation has to compete international and domestic corporationswhich create cut throat rivalry in the global market. In addition to this, it affect the issues to3
End of preview
Want to access all the pages? Upload your documents or become a member.
Related Documents
Emerging Economies Opportunitieslg...
|6
|868
|306
(solved) International Business Assignmentlg...
|14
|5045
|122
Assignment International Business 2022lg...
|20
|4767
|23
The unequal distribution of natural resourceslg...
|9
|2085
|12
Benefits of Investing in Chinalg...
|9
|3054
|50
Business Expansion in Shanghai, Chinalg...
|13
|4450
|310