Emerging Markets

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Article Review: Strategies That Fit Emerging Markets
According to Khanna and Krishna, multinational corporations acknowledge that globalization is one of the most critical challenges in business because it has become increasingly more stringent to pinpoint appropriate internationalization (63). It is harder to invest in developing countries because of the absence of specialized intermediaries contract-enforcing laws in emerging markets (Khanna and Krishna 63). Additionally, institutional voids and the absence of soft infrastructure in emerging markets hampers the execution of globalization strategies. Therefore, discussing the five context framework and three strategic choices that multi-national …show more content…

However, executives have to analyze how open a country is and not rely on the economic classification. For example, according to Khanna and Krishna, many businesses consider India a more closed state in comparison to China because the Indian authorities give international corporations a lukewarm reception (67). However, people can travel in and out of India more freely, and the Indians are more open to ideas from the Western world. A country’s openness to multinational corporations leads to growth in financial intermediaries.
Although developing nations have opened their economies to international corporations, these companies still find it hard to access reliable information about customers, especially low-income earners (Khanna and Krishna 67). Multinational firms risk starting subsidiaries in developing countries due to the absence of useful data about consumer trends. The lack of sophisticated market research firms and advertising agencies in developing countries make it impossible for multinational corporations to find databases with consumption patterns, which would allow them to formulate favorable marketing …show more content…

Before adapting any approaches, the corporation must determine if the advantages of venturing into the new market outweigh the costs it will incur. The corporation has to choose if it will adapt its business model to developing countries while keeping its primary value propositions constant. It can also change the contexts of its business model or avoid the emerging market altogether.
If a company chooses to adapt to the emerging market, it must fill the voids in the product markets (Khanna and Krishna 73). For example, Dell manufactures a wide variety of computers that are configured to the customers' requests. In the United States, Dell sells most of its products on the Internet. One of the benefits of this model is that the company did not have high levels of inventory, which is why it produced units when they were ordered. However, this strategy did not work in China because the Chinese citizens did not buy computers

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