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(PDF) Introduction to Managing in Emerging Markets

   

Added on  2021-04-24

21 Pages3491 Words66 Views
Running head: MANAGEMENT – EMERGING MARKETManagement – emerging marketName of the studentName of the universityAuthor note

1MANAGEMENT – EMERGING MARKETIntroductionThe current business scenario poses huge challenges for the contemporary businessorganizations due to the reason that competition is much intense in the current time with thepresence of huge number of players. Thus, it is important for the business organizations to lookout for new markets in order to cut off the intensity of the competition in the local market and toenhance the customer base in the global market. Contemporary business organizations initiatethe strategy of internationalization in order to enter in the foreign markets and enhance thecustomer base (Cavusgil and Knight 2015). In the recent time, developing economies are beingtargeted by the business organizations in order to tap the growing opportunities in these markets.Moreover, developing markets are having higher growth rate compared to the growth rate of thedeveloped countries. Thus, the business opportunities are more for the business organizations inthe developing countries. Tesco is one of the leading chains of supermarkets based in the United Kingdom. Theyare one of the major retailers in the European regions and have their market base in the Asianregion (www.tescoplc.co 2018). However, in the recent time, they are in the urgent need ofdeveloping new markets to enhance the customer base. They are targeting Brazil and Vietnam asnew market to enter. Both these markets are showing huge market growth in the recent time.However, prior to entering in these markets, it is important to determine the various aspects ofthese markets. This essay will discuss about the industry and market attractiveness of thesecountries. In addition, the distance between the United Kingdom and the host countries will alsobe discussed. Recommended country and entry mode will also be discussed.

2MANAGEMENT – EMERGING MARKETOverall attractiveness of BrazilFigure: 1Overview of BrazilSource: (Www3.weforum.org 2018)Figure: 2Growth rate of BrazilSource: (Www3.weforum.org 2018)

3MANAGEMENT – EMERGING MARKETAccording to the Global Competitiveness Report, Brazil is having the ranking of 6 interms of domestic size. This is due to the reason that they are having the total population of 198.3millions. Thus, Tesco will have huge market opportunities in the Brazilian market. Moreover, interms of the GDP, Brazil is having the ranking of 7 and GDP per capita currently stands at US$11,311. Thus, economy is having favorable position in Brazil and it will help in having favorablebusiness environment for Tesco. Figure: 3Macro-environment of BrazilSource: (Www3.weforum.org 2018)According to global competitive index, Brazil stands at 38 in terms of country creditrating. Thus, it will less risky affairs for Tesco to invest in this country. Moreover, Brazil ishaving the ranking of 110 in terms of the inflation, which is quite favorable compared to someother countries.

4MANAGEMENT – EMERGING MARKETFigure: 4Problematic factors for BrazilSource: (Www3.weforum.org 2018)However, there will have some negative factors that to be faced by Tesco in entering inBrazil. The most problematic factor in Brazil will be the tax regulations. Tesco will face thechallenge of higher rate of tax and complex taxation process. In addition, inadequate supply ofinfrastructure is also one of the major issues in Brazil. This is another area of concern for Tescoin entering in Brazil.

5MANAGEMENT – EMERGING MARKETOverall attractiveness of VietnamFigure: 5Overview of VietnamSource: (Www3.weforum.org 2018)Figure: 6Economic growth of VietnamSource: (Www3.weforum.org 2018)Vietnam is having less population compared to Brazil. Thus, the potential market size forthem will also be lower compared in Brazil. Moreover, the GDP per capita is also lower for

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