Understanding emerging markets
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Emerging markets like Brazil, China, India, Mexico, and Turkey are experiencing rapid economic growth and modernization. They have characteristics like a young population, growing middle class, good education, lower labor costs, and natural resources. Multinational enterprises from these emerging markets are becoming global challengers that seek market share from developed countries. Examples discussed are Cemex from Mexico in the cement industry, Embraer from Brazil in regional aircraft manufacturing, and Tata Steel from India in the steel industry. They were able to initially leverage advantages like lower costs and government support to become international players.
Understanding emerging markets
- 1. Understanding Emerging Markets The New Global Challengers: MNE’s from Emerging Markets Tim Wilson (20082901), 11-24-10, SWU International Business Environment, Prof. SeongBong Lee
- 2. Emerging Market Definition “Emerging markets are countries such as Brazil, China, India, Me xico, and Turkey that, in contrast to advanced economies, are experiencing rapid economic growth, industrializatio n, and modernization.” -Cavusgil, Knight, Riesenberger Currently there are about 28 Emerging Markets in the World http://en.wikipedia.org/wiki/Emerging_markets
- 3. Emerging Markets Some Characteristics Young Population (usually) Growing Middle Class Good Education System Labor Cost Advantages Availability of Skilled Labor, e.g. engineering and leadership talent which is higher than what is reasonably available to competitors in more developed countries Natural Resources Be Aware: New MNE Global Challengers …coming for your market share
- 4. Rapidly Changing World Economics http://67.19.64.18/news/2010/11-15fh/2.jpg
- 5. According to Boston Consulting Groups 2009 Report on the top 100 Global Challengers from Emerging Markets: China 36 India 20 Brazil 14 Mexico 7 Russia 6 Other 17 Taking A Closer Look at Three Emerging Market MNE’s http://www.google.com/imgres?imgurl=http://www.bcg.com.cn/en/img/pict/bo okreport/The_2009_BCG_100_New_Global_Challengers_Jan_2009.gif&imgrefur l=, http://www.bcg.com/
- 6. Mexico Population 2009 esta. 111,211,789 (11th) GDP (PPP)2010 Total$1.541 trillion Per capita $15,323 GDP (nominal)2010 estim ate Total$1.085 trillion Per capita $10,211 Company Focus: Cemex, maker of cement and ready- mix concrete http://en.wikipedia.org/wiki/Mexico
- 7. Cemex is now in 50 countries and growing. It was able to initially take advantage of home country local labor costs and natural resources. In 2008 home country monetary devaluation and high debt load caused Cemex to revaluate extensive debt financed global expansion. Cemex -Worlds Largest Building Materials Supplier started 1906, became international 1992 http://farm5.static.flickr.com/4032/4344786778_067d629cd5.jpg, http://www.hankstruckpictures.com/pix/trucks/felipe_garcia/2006/11- 02/cimg4308.jpghttp://en.wikipedia.org/wiki/Cemex
- 8. Brazil Population 2009 esta.191,796,000(5th) GDP (PPP)2009 estimate Total$2.013 trillion Per capita $10,513 GDP (nominal)2009 estim ate Total$1.574 trillion Per capita $8,220 Company Focus: Embraer, builder of small regional jets http://en.wikipedia.org/wiki/Brazil
- 9. Embraer, was started by the Brazilian government to create a domestic airline manufacturer. Its rival manufacture and primary competitor is the Canadian regional airline manufacturer Bombardier. Main advantage is skilled labor and engineering at low cost with initial government help. Embraer -Worlds Largest Small Regional Aircraft Manufacturer started 1969, became international 1985 http://en.wikipedia.org/wiki/Embraer
- 10. India Population 2010 esta.1,188,943,000 (2nd) GDP (PPP)2009 estimate Total$3.526 trillion Per capita $3,015 GDP 2009 esta. Total$1.235 trillion Per capita $1,032 Company Focus: Tata Steel, maker of various steel products http://en.wikipedia.org/wiki/India
- 11. Tata Steel is the second largest privately owned company in India. Current challenges are energy consumption and pollution reduction pressures. World Steel Dynamics rated it as the best steel company in 2005. Tata Steel is part of a larger India Conglomerate. Tata Steel -Worlds 7th Largest Steel Products Manufacture started 1907, became international 2004 http://www.automobilesreview.com/uploads/2008/12/euro-car-body-award-for-the-audi-q5.jpg, http://www.mcarthur- group.com/images/products/steel/steel2.jpg, http://en.wikipedia.org/wiki/Tata_Steel
- 12. Any Questions, Please? http://i.ebayimg.com/17/!Bg!8oJQBGk~$(KGrHqQOKiIErzIvtI10BLDj,huq(g~~_35.JPG, http://petmarmoset.co m/wp-content/uploads/2009/04/questionsandanswers1.jpg,