Assessment of Strategies for Emerging Market Entry: A Research Project

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EMERGING MARKET ENTRY STRATEGIES
Research Project
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EMERGING MARKET ENTRY STRATEGIES
Table of Contents
Chapter 1: Introduction....................................................................................................................3
1.1 Background of the research...............................................................................................3
1.2 Research aim.....................................................................................................................3
1.3 Research objectives...........................................................................................................3
1.4 Research questions.................................................................................................................3
1.5 Scope of the research.............................................................................................................4
1.6 Structure of dissertation.........................................................................................................4
1.7 Summary................................................................................................................................4
Chapter 2: Literature review............................................................................................................5
2.1 Introduction............................................................................................................................5
2.2 Motive of businesses in entering emerging markets..............................................................5
2.3 Strategies adopted by businesses for entering emerging markets.........................................5
2.4 Risks inherent to the strategies..............................................................................................6
2.5 Summary................................................................................................................................6
Chapter 3: Research Methodology..................................................................................................7
3.1 Introduction............................................................................................................................7
3.2 Research philosophy..............................................................................................................7
3.3 Research approach.................................................................................................................7
3.4 Research design.....................................................................................................................7
3.5 Data collection method..........................................................................................................7
3.6 Data collection tool................................................................................................................8
3.7 Method of sampling...............................................................................................................8
3.8 Sample size............................................................................................................................8
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3.9 Ethical consideration.............................................................................................................8
3.10 Summary..............................................................................................................................8
References........................................................................................................................................9
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Chapter 1: Introduction
1.1 Background of the research
Emerging markets primarily comprise of such countries which possess some characteristics of
the developed economy, but does not meet the standards to qualify as a developed market. The
emerging markets of the world mainly consist of the four largest emerging economies through
purchasing power parity or adjusted Gross Domestic Product (GDP), namely, Brazil, Russia,
China and India. Businesses have major incentives in entering the emerging markets on account
of the increased demands for new kinds of goods and services. Emerging markets provide for a
conducive jurisdiction in terms of establishing a brand and eliminating competition. It helps the
businesses in being part of the growing infrastructure and such economies help in providing a
buffer against recession. The present research study deals with the determination and analysis of
various strategies that may be adopted by businesses for entering emerging markets.
1.2 Research aim
The aim of the research to assess the various strategies adopted by businesses for entering
emerging market economies and evaluates the suitability of such strategies in a different
scenario.
1.3 Research objectives
 To identify the different strategies that are employed by businesses for entering an
emerging market;
 To analyse the issues associated with the adoption of such strategies;
 To evaluate the efficacy of the strategies adopted for entering an emerging market;
 To provide further recommendation in the suitable engagement of such strategies
1.4 Research questions
 What are the different strategies that may be adopted by businesses for entering into
emerging markets?
 What are the lacunae present in such strategies?
 How can the strategies adopted by the businesses be made further effective?
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1.5 Scope of the research
The research study, in its limited scope, focuses on the strategies that may be adopted by the
businesses for entering the emerging markets and the issues associated with the adoption of such
strategies. It research study restricts from engaging in a contextual analysis of the efficacy of
such strategies in different jurisdictions.
1.6 Structure of the dissertation
Chapter 2 of the research study provides the literature review for the purpose of establishing
an overview of the topic with the help of associated literature.
Chapter 3 of the research study indicates the research methodology followed for conducting
the research which includes the methods of data collection and analysis.
Chapter 4 of the research study establishes the findings of the study based on primary and
secondary research. It includes tabular information and graphical representations.
Chapter 5 of the research study mentions broad discussions in relation to the findings.
Chapter 6 of the research study indicates the conclusion of the project along with providing
further recommendations based on the findings.
1.7 Summary
The chapter focuses on the research aim and objectives and mentions the scope of the study. The
structure of the dissertation indicates the framework that will be followed throughout the
dissertation.
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Chapter 2: Literature review
2.1 Introduction
This chapter provides a literature review of the related concepts of the research topic. The
literature review attempts to establish a broad overview of the research study. It focuses on the
aspects of the incentives for businesses in entering the emerging market, strategies that are
adopted by the businesses in entering the emerging economy jurisdictions and the issues that are
inherent to such strategies.
2.2 Motive of businesses in entering emerging markets
Globalisation has led to the reduction of middle-class jobs in the developed economies, but it has
led to the emergence of the middle-class population in the emerging economies. A stated by
Sundström and Radon (2015), the middle class is growing exponentially, especially in Asia,
Africa and Latin America. Industry reports indicate that there will be 3.2 billion middle-class
consumers by 2020 in contrast to 1.8 billion middle-class consumers in 2009. However, the
middle-class demographics in the emerging markets are diverse as they are younger and tend to
be less affluent than their counterparts in the developed economies. Also, the emerging markets
are witnessing higher rates of urbanisation. Most of the growth is held to be happening in smaller
cities. As mentioned by Meyer and Peng (2016), the urbane growing middle-class population
provides for huge market opportunities for luxury or specific goods. The scarcity of such
products provides lucrative opportunities for businesses. The emerging economy may also
provide for an untapped market for the products or services offered by businesses. In such a
scenario, it becomes easy to establish a brand and acquire significant market share.
2.3 Strategies adopted by businesses for entering emerging markets
As indicated by Marquis and Raynard (2015), the different strategies that may be adopted for
entering into an emerging market may include exporting, licensing, franchising, joint venture,
setting up new venture and outsourcing among others. The export company will engage a local
distributor who may already have an existing client base, supply chains and experience in the
local market. Licensing will allow for the local entity to use the parent company’s name and
undertake production selling of the products within the ambit of a license agreement. The
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company stands to receive royalties in exchange. As stated by Lasserre (2017), such option
becomes particularly lucrative if the licensee holds a good position in the market. Franchising
operates within the brand name of the company and uses the operating systems and marketing
campaigns as well. In the case of the joint venture, the company partners with another entity and
the former company can benefit from the infrastructure of the local partner.
2.4 Risks inherent to the strategies
As stated by Karolyi (2015), the major issues to such entry strategies include multiple risks in the
parameters of the market, financial and operational. The market risks involve local government
practices, unpredictable regulatory and political environment, the unclear legal title of seller
assets and challenges related to valuation. The financial risks related to poor quality of financial
information, inadequate reporting of liabilities. It also focuses on tax-driven accounting and
continuously changing tax regime. There are also risks related to intercompany and related
company transactions. As indicated by Chetty et al. (2015), the operational risks include lack of
infrastructure and operational controls among others.
2.5 Summary
The literature review indicated that the various strategies include exporting, licensing,
franchising, joint venture, setting up a new venture and outsourcing. With the ever-increasing
middle-class population, emerging markets put forward lucrative opportunities for businesses.
However, there are market, financial and operational risks.
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Chapter 3: Research Methodology
3.1 Introduction
This chapter indicates the research methodology that will be followed while conducting the
research study. It will mainly put forward the framework for data collection and analysis.
3.2 Research philosophy
The study will engage in pragmatist research philosophy which will enable the incorporation of
mixed or multiple method designs. It will provide for the scope of both quantitative and
qualitative research strategy (Kumar 2019).
3.3 Research approach
Research approach relates to the overall plan or procedure that comprise of the broad methods of
data collection, data analysis and interpretation of the same. The research study will incorporate
the deductive research approach which will enable the research strategy to be designed for the
examination of the assumptions (Silverman 2016).
3.4 Research design
Research design provides the framework for the presentation of the data. The research project
will have to adhere to a systematic approach for the application and analysis of data. The present
research study utilises the descriptive research design in providing a clear description of the
relevant concepts (Taylor et al. 2015).
3.5 Data collection method
The data collection method involves both the primary research method and the secondary
research method. The primary data will be generated directly from the respondents, and the
secondary data is procured from the published studies. Analysis of primary data help for arriving
at nearly conclusive findings and secondary data provides for the initiating point of the research
and lends to the credibility of the study (Flick 2015).
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3.6 Data collection tool
The data collection toil comprises of both survey questionnaire and face to face interview. These
primary data collection tools usually lead to high expenditure and also proves to be time-
consuming.
3.7 Method of sampling
The study employs a random method of sampling which provides the scope for the generation of
high degree authentic data.
3.8 Sample size
The number of respondents in the survey amounts to 100 and includes 3 participants in the
interviews. The participants are selected in a randomised manner.
3.9 Ethical consideration
The researcher retains the proprietary interest over the primary data gathered. The primary data
will be stored in a secured manner, and the same will not be used for personal benefit. The
privacy and confidentiality of the participants will be maintained and prior informed consent will
be obtained.
3.10 Summary
The research study will engage in pragmatist research philosophy and utilises the deductive
research approach. The study will incorporate a descriptive research design and engages both
primary and secondary research method. The research will use a survey questionnaire and face to
face interview as the data collection tool and will employ a random method of sampling.
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References
Chetty, S., Ojala, A. and Leppäaho, T., 2015. Effectuation and foreign market entry of
entrepreneurial firms. European Journal of Marketing, 49(9/10), pp.1436-1459.
Flick, U., 2015. Introducing research methodology: A beginner's guide to doing a research
project. Sage.
Karolyi, G.A., 2015. Cracking the emerging markets enigma. Financial Management
Association.
Kumar, R., 2019. Research methodology: A step-by-step guide for beginners. Sage Publications
Limited.
Lasserre, P., 2017. Global strategic management. Macmillan International Higher Education.
Marquis, C. and Raynard, M., 2015. Institutional strategies in emerging markets. The Academy of
Management Annals, 9(1), pp.291-335.
Meyer, K.E. and Peng, M.W., 2016. Theoretical foundations of emerging economy business
research. Journal of International Business Studies, 47(1), pp.3-22.
Silverman, D. ed., 2016. Qualitative research. Sage.
Sundström, M. and Radon, A., 2015. Utilising the concept of convenience as a business
opportunity in emerging markets. Organisations and Markets in Emerging Economies, 6(2),
pp.7-21.
Taylor, S.J., Bogdan, R. and DeVault, M., 2015. Introduction to qualitative research methods: A
guidebook and resource. John Wiley & Sons.
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