Emerging Markets
Aiman S
EMERGING MARKETS
With the developed world markets becoming increasing saturated, the multinational corporation (MNCs) have now turned to the emerging markets of the world. These countries which are on their way through modernization, are now a potential source of revenue for MNCs, countries such as Malaysia, Indonesia, India and China. However for companies to enter the markets, there will be challenges that they will have to overcome, as to tap the potential revenue goldmine. This is because, every country has a different and unique background or culture in doing businesses. In this assignment, I shall discuss on the types of strategic approaches MNCs use as to gain entry through a particular market. The strategic approaches which firms use as to do business in emerging markets that shall be discussed here are through Foreign Direct Investment(FDI), Licensing and Franchising. We shall discuss each method and analyze the benefits, the risks involved and other factors which may lead to the application of the method in different countries around the world. But first, we must define, what is an emerging market and how does a country fall into that category. The term emerging markets was coined by economist at the International Finance Corporation (IFC) in 1981 but after many years, the term had changed meanings and evolved by definition and is now defined as a new market structure arising from digitalization, deregulation, globalization and open-standards, that are shifting the balance of economic power from the sellers to the buyers (BusinessDictionary, 2013)
Another question which must be asked and answered before going any further is that why should businesses invest in emerging markets, pouring in hundreds and millions of dollars in a potentially risky investment, when they can further strengthen their domestic markets with the same value of money. Well the answer is simple, according to Forbes, emerging market are increasingly important
EMERGING MARKETS
With the developed world markets becoming increasing saturated, the multinational corporation (MNCs) have now turned to the emerging markets of the world. These countries which are on their way through modernization, are now a potential source of revenue for MNCs, countries such as Malaysia, Indonesia, India and China. However for companies to enter the markets, there will be challenges that they will have to overcome, as to tap the potential revenue goldmine. This is because, every country has a different and unique background or culture in doing businesses. In this assignment, I shall discuss on the types of strategic approaches MNCs use as to gain entry through a particular market. The strategic approaches which firms use as to do business in emerging markets that shall be discussed here are through Foreign Direct Investment(FDI), Licensing and Franchising. We shall discuss each method and analyze the benefits, the risks involved and other factors which may lead to the application of the method in different countries around the world. But first, we must define, what is an emerging market and how does a country fall into that category. The term emerging markets was coined by economist at the International Finance Corporation (IFC) in 1981 but after many years, the term had changed meanings and evolved by definition and is now defined as a new market structure arising from digitalization, deregulation, globalization and open-standards, that are shifting the balance of economic power from the sellers to the buyers (BusinessDictionary, 2013)
Another question which must be asked and answered before going any further is that why should businesses invest in emerging markets, pouring in hundreds and millions of dollars in a potentially risky investment, when they can further strengthen their domestic markets with the same value of money. Well the answer is simple, according to Forbes, emerging market are increasingly important
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