BM413 Assignment: Global Business Environment and Emerging Economies

This report examines the opportunities presented by emerging economies for global business expansion. It highlights key advantages such as the development of a consumer class with increased spending power, the potential for innovation due to cheaper resources and labor, and the opportunity for unrestricted growth through market analysis and cultural adaptation. The report provides examples of companies like Gillette, Nestle, and McDonald's, demonstrating how they have successfully navigated these opportunities. It emphasizes the importance of understanding local markets and consumer preferences. The report concludes that, when properly utilized, the opportunities in emerging economies can significantly contribute to a company's revenue generation. The report includes a table of contents and a references section with cited books and journals.

BUSINESS

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
advantages by integrating their expansion with such merging economies. The different
opportunities that are presented by such emerging economies can be categories as follows:
 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.
 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
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herbal soup so that the time could be saved and the market preference for their product
was also high.
 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.
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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. In State-
owned multinationals (pp. 175-210). Palgrave Macmillan, Cham.
Singh, D., and et.al., 2018. Corporate expansion during pro-market reforms in emerging markets:
The contingent value of group affiliation and diversification. Journal of Business
Research. 82. pp.220-229.
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