The Rise of Multinationals from Emerging Economies by Palitha Konara download in pdf, ePub, iPad
As previously mentioned, multinationals from first world countries have been attracted to third world or developing countries. Having low labor cost, China has been a competitive cost-leader specialized in the manufacturing and production industry. Another reason for investing in research is in order to compete with westerners on qualitative basis rather than only cost basis, maximizing their opportunities in the global market. But those that strived for excellence nonetheless were able to expand fast when liberalisation set in. Suzlon of India listened to the market in a different way.
After pioneering the market with its release of the first smartphone, Iphone, Apple has been facing fierce competition from its rival Samsung. Recognizing the huge potential in the market for alternative energy, it sold off its textile business in and is now exclusively devoted to the development of wind farms.
This suggests that, in their present expansion phase, emerging market multinationals have a stronger focus on revenues and market growth than on profit margins. In past decades, it was pretty much self-evident that multinationals came from rich nations. In addition, emerging markets are often distinguished by some level of political and institutional instability, and ongoing demographic growth. Lenovo has proved to be a fierce competitor in its domestic and international market as it is responding to the market need through developing new products. The company then went global with this strategy, and Corona Extra is now the number-one import beer in China, India, Japan, Australia and the United States, among others.
Lenovo is one example of a Chinese multinational, partly government owned, that has fought to be recognized as a global brand. Now, Slim put his foot on the gas. Throughout history, it has been a communist country with closed boundaries, delaying it to innovate and take part in the international economy.
Recently it has expanded its product range introducing smartphone and tablets. As we have noted in the article, some emerging market multinationals are partly state-owned, and as a fact, in most of these governments, corruption levels are high. Developing countries became major hubs for foreign investments. In each market it has entered, it has scaled rapidly. With Lenovo, we have seen a Chinese company overcome the issues with being accepted and recognized as producers and manufacturers of high-end brands.
The term was first coined in by economists at the International Finance Corporation. Moreover, even though a narrow market in just one country may be marginally profitable at best, the numbers turn favorable when serving that same niche across many national markets.
Government agencies can supply valuable information and advice, and ambassadors to foreign countries can speak up for private-sector companies. Multinationals were broadening their portfolios through these investments, increasing market shares, and becoming cost efficient competitors. So these countries lowered the restrictions and regulations through decreasing corporate and business taxes, reducing barriers to entry and trade. The competition from these new leaders has become more acute both in developed and emerging markets.
Flexible production systems allow companies to produce small batches and still make a profit. You execute to figure out what strategy works, and then you pursue it relentlessly by focusing on execution itself.
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