Opportunities for Global Expansion in Emerging Economies

This report discusses the opportunities for global expansion in emerging economies for businesses. It explores the strategic options of Ansoff generic model and the impact of Donald Trump's economic policies on China. The report also focuses on Aviva insurance company as a case study.

GLOBAL BUSINESS
ENVIRONMENT
PORTFOLIO

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
PART B............................................................................................................................................3
PART C............................................................................................................................................4
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................1

INTRODUCTION
In this report, we study about the term emerging market and discuss and interpret that
how emerging economies are presenting opportunities for global expansion for insurance
businesses by applying the strategic option of Ansoff generic model. This report will also state
the various approaches of Donald Trump's to economies policy and impact of the policy upon
China economies.
MAIN BODY
PART B
Economic policy is refers to the government action to make changes in the economic
field. It is divided into three policy such as fiscal, monetary and supply side policy. When
government make changes in the tax rate it is known as fiscal policy. When government make
changes in the money supply by changing interest rate it is known as monetary policy. When
government try to increase the production capacity it is known as supply side policy.
President Donald Trump's approaches to economic policy have a great impact upon the
foreign economies. Donald Trump initiated the trade war with china. Trade war is a situation
when world imposes tariffs on import of goods and services from the foreign countries. Donald
trump starts the trade war with china in order to protect its domestic industry and create more
jobs for their resident individual. Initiating tariffs creates competitive advantages for the
domestic producers of that product. In order to increase the employment rate and reduce trade
deficit US starts trade war with china. Donald trumps imposed three tariffs on imports from
china. Trade deficit occurs only when imports are more than exports.
Firstly, trade war cannot reduces the current account deficit of the US. In order to fix the
trade imbalances and avoid the trade war china must step up economic reforms. In order to avoid
the cause of US-China trade war the first thing china do is raises its interest rate in order to
prevent the further devaluation of china currency. Because of the advance technology of china,
competing with the china products is difficult. Until both US and china are ready that they have
achieved their goals, the conflict will likely to continue. The relationship between the two largest
economies in respect of trade are highly important for both the countries. The trade war and
covid situation had vanish the relation between the both.

During this pandemic situation, President Donald Trump referred this situation as
"Chinese virus" as this virus is originated from the wuhan city of china. President also declare
the statement that WHO also involve in this and withdraw US funding from the institution.
Because the standard of living of China is low it become easy for the chinese company
to reduce the wages of the workers. So in this case US companies do not compete with the
chinese companies in respect of low cost advantages. US companies also need raw material at
low cost which only they can take from china because not everyone has ability to pay more for
promoting " Made in America".
Trade war with china do not affect the economy of china. China is the country where the
production of all kinds of product take place and is the no. 1 exporter in the world(Zoller-
Rydzek, Felbermayr, 2018). In order to make the product, US has to depend upon the chinese
imported goods. The raw material is send by the china to the US for further production of goods
and services. Most of the electronic appliances of the China are used by half of the population of
the US. So the donald trump policy of trade war do not affect the China economy. In order to
win the trade war policy, China decreases the importation of agriculture products from the USA
so that this decision of the china can harm the farmers of the USA. China take this decision in the
hope that farmers would pressure the trumps administration. But at this time losses this trick as
farmers could continue to support the president Donald Trump. So in this case we can say that
China has won the Trade war policy of US.
PART C
Emerging markets are the countries which show wide economic growth due to the
development of both industrial and technological sectors. In present era, insurance industry are
showing global expansion by entering into emerging market. As growth in mature market is
slowing down so most of the insurance business are turning themselves into emerging market
such as Aviva insurance company. Aviva is a multinational UK based insurance company which
offers the life and non life insurance services to the public. In order to enter into emerging
market Aviva plc applies the Ansoff generic mode(Asef,et.al., 2017)l. Ansoff matrix is a tool
which help the company to see possible growth in the company and help the businesses to enter
into emerging market.
The Ansoff generic model of Aviva plc are:

 Market penetration: Market penetration is a situation in which company offers the
existing product in the existing market(Loredana, 2017). It is a primary strategy which
involve the sales growth within the current customer base. For adopting this strategies,
Aviva plc has to increase its sales by lowering its premium cost through cost leadership.
During the starting of Aviva plc growth stage, market penetration strategy plays a very
important role in making the company successful in existing market. This strategy help
the company to expand its customer base until it reaches its saturation point. After
reaching the saturation point increasing expenses on promotional activity is become
worthless sometime(Fabus, 2018). In the near future, company may take the advantages
of increasing brand personalities and awareness through high market penetration in order
to offer the new product to the existing as well as new customer. In order to pursue the
market penetration strategy company has to bear the expenses of advertisement and other
promotional activity during the saturation period.
 Product development: Product development is a situation in which company offers the
new product into its existing market. It is a secondary strategy to achieve its growth
objective. From the initial stage Aviva plc continuously extended its product line and
make strong customer base and loyalty. So in order to offer the new product into the
existing market is become easy for the company as they compensate the loss from one
product with the gains from other product. So in order to pursue this strategy Aviva plc
has to focus on offering the product which are close to the current product line or offering
the product which is related to the purchase behaviour of current customer. In order to
develop the new product company must analyse the taste and preferences of the existing
customer. Aviva plc launches Simple life insurance in UK is the perfect example of
product development.
 Market development: Market development is a situation in which company offers its
existing product into the new market. It is a supporting strategy of market penetration and
product development strategy. In order to pursue the market development strategy, Aviva
plc has to enter into the new countries for expanding the existing product in all over the
world(Kokodey, Gnezdova, Lomachenko, 2018). The company is already applied this
strategy, as a result, the company are present in across 16 countries including Europe,
Asia, China etc. To adopt this strategy, Aviva plc is continuously investing in research

and development to expand the distribution network of the company to reach the every
corner of the company. Aviva plc launches the Aviva life insurance into the india called
Aviva India is a perfect example of market development.
 Diversification: Diversification is a situation in which company enter into the new
market with their new product. It is a supporting strategy as it support only the growth the
company achieved from market penetration and product development. Diversification is
also further divided into related diversification and unrelated diversification. Related
diversification means launching the new product which is related with the existing
product. Unrelated diversification means launching new product which is not related with
the existing product of the company(Vlados, Chatzinikolaou, 2019). In order to adopt this
strategy Aviva plc has to use the advantages of brand awareness among the existing and
new customer to launch the related product into the global industry. Aviva plc has
already adopt the diversification strategy when Aviva India launches the New wealth
builder plan which is the related product of the existing company. Aviva plc main aim of
turning the company towards diversification and entering into the emerging market is to
earn high profit and increase the market share of the company in order to expand the
economy of the country.
So from the above discussion, we interpret that how Aviva plc grab the opportunities of global
expansion by entering into emerging market and launch different products into the different
corner of the world by applying the Ansoff matrix. This show that how emerging economies are
providing global expansion.
CONCLUSION
In this report, we understand the term emerging economy, fiscal policy, monetary policy
and supply side policy. This report conclude that how the emerging economies are presenting
opportunities for global expansion for businesses. In this report we conclude the situation of
expanding the businesses global by taking the example of Aviva insurance company and by
applying Ansoff matrix to the company. This report also conclude the Trade war policy of
Donald trump that impacts upon the economy of china.

REFERENCES
Books and journals
Asef, P., and et.al., 2017. An alternative organic growth through acquisitions investigation on
wind energy. Energy Procedia. 115. pp.298-307.
Fabus, M., 2018. BUSINESS ENVIRONMENT ANALYSIS BASED ON THE GLOBAL
COMPETITIVENESS INDEX (GCI) AND DOING BUSINESS (DB): CASE STUDY
SLOVAKIA. Journal of Security & Sustainability Issues. 7(4).
Kokodey, T., Gnezdova, I. and Lomachenko, T., 2018, October. Modeling the global business
environment based on polycyclic theory. In The International Science and Technology
Conference" FarEastСon" (pp. 487-499). Springer, Cham.
Loredana, E.M., 2017. The use of Ansoff matrix in the field of business. Annals-Economy
Series. 2. pp.141-149.
Tsatsoula, E., 2018. Application of Ansoff's Matrix-Methodology: Marketing Growth Strategies
For Products.
Vlados, C. and Chatzinikolaou, D., 2019. Methodological redirections for an evolutionary
approach of the external business environment. J. Mgmt. & Sustainability. 9. p.25.
Zoller-Rydzek, B. and Felbermayr, G., 2018. Who is paying for the Trade War with China? (No.
11). EconPol Policy Brief.
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