INTERNATIONAL BUSINESS OPERATIONS
Introduction
Emerging markets in developing economies have great future comparing with the firms from developed markets. The developing economies face a lot of challenges in comparison with well-established firms. In the next decade, there are opportunities essential in promoting the emerging market. The firms in emerging market have looming future in the production and manufacturing sectors. The essay describes the opportunities and challenges that the firms from emerging market face and comparing them with firms from developed markets. Furthermore, the essay will establish and elaborate on these opportunities and challenges comparing the firms in both emerging and developed markets.
Opportunities and Challenges for Firms in Emerging Markets
Opportunities
Firms from developing and emerging markets have greater opportunities comparing to firms from developed markets. The strengths in these developing markets come from availability of resources that are not exhausted making the market more vibrant. The emerging markets identify market gap in the developed markets and use these opportunities to explore and excel in the marketing (Mark, 2016, p. 20). The emerging markets require favorable marketing environment, identifying market structure, strategy, and market mix. There are various opportunities for emerging markets comparing to the developed markets. These opportunities such as technology, urbanization, industrialization and capital availability have contributed to developing economies.
Technology enabled enterprises development has created a great platform in the emerging market improvement. The firms in the emerging market such as agricultural sector, pharmaceutical industries and tourism sectors have taken advantage of available technology and incorporating it into their activities. These enterprises focus on expanding their output, market size and dimensions (Kumar, Sudipta, & Rihana, 2016, p. 358). Through the help of technology, the emerging market has identified many potential opportunities to compete effectively with developed market. Technology development has enlightened firms to identify their potential in production and marketing worldwide.
In emerging market, advanced technology has been applied in different humble ideas such as money transfer, electronic industry and cottage industry. The technology helps in connecting the buyers and sellers of the products. The use of applications and ads in marketing has enabled the firms to perform excellently in the market (Olga, Pascal, Benoit, & Patrick, 2016, p. 286). These firms have identified market gap from the developed markets. Through the technology, the emerging market uses these gaps to express their innovative ideas. Furthermore, development of high-quality products from natural raw material has attracted even developed markets interests . This shows that currently and in future, emerging market has a great opportunity to perform better.
Urbanization and industrialization in the developing countries has contributed in the emerging market to improve. Urbanization as an opportunity for the emerging market, it creates demand for the products and services produced (Arun & Subhash, 2016, p. 512). The firms in these developing regions tend to have a chance of showcasing their product and services to attract the buyers. Furthermore, the urbanization provides a chance for the firms to improve their production and meeting the demand of customers. This is to compete effectively and increasing their market sizes.
Industrialization is another area that provides a great opportunity for developing market and economy. The investors from developed countries use this chance to improve on the local products to meet international level. Industrialization helps in creating job opportunities for the unemployed people (Daryn, 2014, p. 43). Furthermore, it utilizes the raw material through manufacturing to produce high-quality products that compete effectively in the international market. The emerging market has higher chances of developing through attracting more investors to take advantage of availability of raw material. Processing and manufacturing help to improve the purchasing power of the refined products . These strategies improve the market and economy of the country through advancing on firms venture, increasing returns and GDP development.
Companies in emerging economies are developing at a greater pace and hence providing chances for career growth. These firms are entering into international levels and hence becoming global firms. This provides a platform for creating more career opportunities as these expansions require management positions and expert (Mattson-Teig, 2013, p. 54). The skills and knowledge from the developed countries have great impact on these emerging markets through mentoring and guiding career growth. This helps in closing the gap that existed between the emerging and developed economies. Furthermore, regarding remuneration improvement, the emerging economy firms regulate the wage rate to comply with international standards. Therefore, career growth in the emerging market develops to meet the international standards and hence creating more chances for new individuals with skills and knowledge to work in these newly international firms.
Career growth incorporates the development of talents, skills, and expertise in the certain field and how they contribute to the economy. In the emerging economy, these attributes of talents, skills and expertise are being discovered and hence utilized in the economy (Mattson-Teig, 2013, p. 55). The market development has seen these skills being capitalized and hence enhancing their contributions. The talents have been used innovatively to improve the economy performance. Skills and knowledge have been incorporated into economy through holding vital positions in firms. The career growth has provided another platform for emerging market development (Tommy, 2010, p. 27). In the developed economies, the career growth has been fully utilized compared to developing countries. The emerging economy is taking career growth as an advantage in improving on performance. The young and energetic people with talents and skills are highly motivated to work in the emerging market. They work long hours and non-routine shifts to take advantage of the expanding market. Therefore, this has managed to enhance the emerging market opportunities in competing effectively with other firms in developed markets.
In developing economies, there are unexploited raw materials. The firms depend on these resources as the source of capital. In the developed countries, the exploitation of resource has deprived the firms enough capitals and resources, and hence outsourcing from other regions (Joseph & Norbert, 2016, p. 88). The developing countries have an abundance of these resources and hence using that opportunity in competing with other international markets. The investors are focusing on the emerging market in the developing countries to cuts the cost of outsourcing raw material.
Challenges facing emerging market
The emerging market is experiencing challenges related to market establishment and competition. The developed markets have taken over in different sectors in international level. International firms occupy the strong positions as the multinational companies. It is challenging for emerging market to enter into the already established sector. These challenges in emerging market includes market competition, trading blocs, limited capital and economies of scale in production especially from developed market.
Competitiveness of developed enterprises in developed markets is a great challenge to firms in emerging market. In the emerging economies, the production and manufacturing industries do not have a well-established market base to compete effectively with developed firms. This makes it had for the developing economies to sustain the needed effort to have high technology, expertise, and understanding manufacturing (Elango & Chinmay, 2013, p. 2464). Furthermore, it is a challenge for the developing economies to brand their products to meet the standards of developed and well-established market. The international firms have identified their position in the market as leading firms and hence being more challenging for emerging firms to express themselves in the same market effectively.
The developed market operates in regional and trade bloc that regulates the standards of goods and services. These trading blocs are essential in supporting the regional economy through importing and exporting among the trading countries members. Issues such as tariffs, tax exemption, and levies are considered to be much lower for the member countries and extremely high for non-member countries (Jagdish, 2011, p. 174). In trading in the region, there are certain procedure and standards of the products that are supposed to be considered. These standards are higher and hence preventing other countries from meeting the set regulations. Emerging economies do not have the capacity to meet these standards and hence do not have the market to trade their products (Anca, Cristina, & Liliana, 2011, p. 430). Furthermore, they lack the capacity of production procedure to meet the quality required in these trading blocs such as the European Union. This is a great challenge that faces emerging market as developed market trade among themselves in their trading blocs and providing limited chances to emerging economy.
Developed markets consist of the firms that have established themselves and operating on economies to scale. These firms have cooperated and merged with others to work on different products and services. These product and services are differentiated to target large market (Rouibah, Khalil, & Hassanien, 2009, p. 104). The strategy that developed market employ is producing large units of products and charging lower prices. This is a challenge to emerging economies as the firm’s targets high production and high profits. This profit is aimed at improving the firm and expanding their operation (Ayyagari, 2007, p. 326). Therefore, having the same products in the market and charging lower prices, it makes emerging market to lack enough support.
The firms from developed markets had a great time to establish themselves as they have enough resources, strong structure and have studied the international market dynamics. The emerging market economies are trying to enter the international market and testing their competitive standards (Chase, 2005, p. 128). This is very challenging as the newly firms from emerging market tend to enter in the market with giants firms from international corporations. The international firms’ uses different strategies to increase their market size depending on the regions targeted. Therefore, economies to scales help in strategizing on their domination over the developed market and emerging markets.
The upcoming market in developing economies faces a challenge of limited capital to enable them to compete effectively. The funding and infrastructure capitals are essential in achieving the firm’s production and manufacturing goal. The infrastructural capital is essential in ensuring all the tools and equipment used in manufacturing are in position (Morroni, 2006, p. 194). This tools and equipment ensure the entire standards required in production are achieved. In the developed countries, the tools and equipment used are of high quality and hence they perform excellently (Nontuthuzelo & Melanie, 2016, p. 38). Furthermore, the nature of the equipment and tools helps in defining efficiency and effectiveness in production. Therefore, in developed country, they have used technology innovation to have automatic equipment and tools. It helps in producing high quality and a large volume of product per unit and hence competing effectively in the market.
The income capital is also a challenge for emerging market. The firms lack funding to supports its infrastructural expansion. The resources are essential for high-quality production and require being purchased from the developed countries (Etemad, 2013, p. 86). The outsourcing process for funding from the developed economies is demanding and hence difficult to acquire. This financing comes with a lot of regulations and supervision hence being inflexible for developing firms. This makes emerging firms lack full utilization and compete effectively due to limited capital.
Conclusion
The opportunities and challenges facing firms from emerging market differ depending on the nature of the market in production. The opportunities for developing economies have helped firms from emerging market to compete effectively with the firms from developed markets. The approach of emerging market has shown bright and promising future. The firms are identifying the production gap in the developed market and capitalizing on these opportunities. On the other hand, the developed markets are also facing challenges. The emerging markets strategize on overcoming these challenges and performing better. Therefore, in the next decade, the emerging markets have greater opportunities in performing better.
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