The emerging markets currently serve as the world`s economic development engine. There is great hope in the growth of the global economy and these companies take advantage of the emerging market opportunities. The risks are high but these firms have learnt to cope with them.
The rise of the emerging markets leads to an increase of the companies had previously threatened the multinational corporations. These firms are increasingly investing in their home markets posing as competitors and are making investments into other emerging and advanced economies. These firms produce innovative designs that reduce the cost of manufacturing (Gregoriou, 2010). They understand that the customers have limited means and by producing an item that will substitute the other, the firm makes a sale. This disrupts the entire industry. An example is India’s Tata Motors who have manufactured a car costing less than half the cost of any car in the market globally. Tata has invested in many industries. This enables it to have profits that will cushion it from losses in other sectors that they have invested. Examples of companies in the emerging markets include the Samsung Electronics, China Petroleum and Sinopec.
These firms develop many flexible ways to meet the demands of the customers at the bottom. The firms have studied the market and realized that due to the increase in population, there will be an expected growth in the market. The population of the middle class will be high and most of them will live in cities that are not even been built. Physical Infrastructure like sanitation, electricity systems, water supply and roads and soft infrastructure like consultancy services, recruitment agencies will have to be there to deal with market.
The emerging markets have diversified in offering these services. To meet these demands, it would require both the public and private partnership. New approaches that will ensure streamline the needs of the people according to their earnings. These firms are likely to focus on their core business in the future. This is because the market will have developed and the small firms will develop to become bigger companies that can offer the services to meet the needs of the customers.
References
Gregoriou, G. N. (2010). Emerging markets: Performance, analysis and innovation. Boca Raton: CRC Press.
