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Emerging economies present opportunities for global expansion for businesses
Economy of a country is a key factor that determines the growth and development of businesses situated there. Emerging economies are those countries whose economy is increasingly growing as to become advanced but still not classified as a developed nation. The key elements of emerging market economies are lower than average per capita income, more than average return for potential investors, increasing market volatility, rapid growth witnessed recently and lesser mature capital markets. All of these together helps in establishing a emerging market economy. As per statistics March 2018, the Morgan Stanley Emerging Market Index classified 24 countries as emerging economies. These are Brazil, Indonesia, Chile, Korea, Malaysia, China, Colombia, Egypt, Czech Republic, Greece, Hungary, India and some more (Outperformers: High-growth emerging economies and the companies that propel them, 2019).
Emerging economies encourage business enterprises to take their trade and production to a global level. They present opportunities for fostering globalisation among entities by reducing trade barriers and facilitating free flow of goods and services from one place to another. Emerging economies play a key role in providing opportunities for companies in demographic as well as economic terms, both at macroeconomic and microeconomic level. When economy of a country is growing, it tends to create positive chances for corporate world wherein entities come in contact to facilitate healthy business relationships. By making use of such relations, enterprises intend to expand their businesses by taking to various geographical locations not yet explored.
A leading example of how emerging economies strive to create opportunities for global expansion of companies can be demonstrated by gaining an insight into Coca Cola. Over years, this entity has taken the advantage of global expansion. Coke began with the process of operating internationally in early 1920's and global expansion in early 1920's. This enterprise mainly emphasizes upon selection of such regions which have a potential and capability for facilitating business growth. Company's strategy over years has been to tap the advantage of entering and functioning in unexplored, undeveloped and hostile economies. In the start, Coke expanded its production by bottling the beverage facilities in locations like Guam and Europe. When company gained significant popularity and recognition, they began expanding into Austria, Australia, Italy, South Africa and Norway (The Chronicle of Coca-Cola: A Global Business, 2018). By tapping advantage of good communication, transportation and infrastructure facilities, companies like Coca Cola expand globally and gain a strategic edge over those companies that are operating in limited countries.
By expanding on a global level, companies tend to get access to talented personnel. It has often been observed that labour in international markets pose a lot of advantages for enterprises. They are much more skilled, competent and talented. They offer raised productivity, advanced skills in relation to language and observation and often belong to diversified educational backgrounds. This gives an edge to companies and thus, companies desire to expand globally. A remarkable example of this is Apple Inc. which has established its major manufacturing units in China. This is largely done so as to tap the advantage of cheap and qualified labour present there which helps Apple Inc. to successfully execute the production process. Another example of this can be the expansion of Netflix in Amsterdam. When company facilitated expansion, management was highly impressed with the multilingual workforce present in the city which Netflix could hire. By hiring multilingual staff, company aimed at ensuring that employees can easily perceive the mindset and culture of consumers spread across different territories within Europe (13 Businesses With Brilliant Global Marketing Strategies,&n