Understanding emerging markets

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

Currently there are about 28 Emerging Markets in the World

Emerging Market Definition

“Emerging markets are countries such as Brazil, China, India, Mexico, and Turkey that, in contrast to advanced economies, are experiencing rapid economic growth, industrialization, and modernization.” -Cavusgil, Knight, Riesenberger

http://en.wikipedia.org/wiki/Emerging_markets

Be Aware: New MNE Global Challengers …coming for your market share

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

Rapidly Changing World Economics

http://67.19.64.18/news/2010/11-15fh/2.jpg

Taking A Closer Look at Three Emerging Market MNE’shttp://www.google.com/imgres?imgurl=http://www.bcg.com.cn/en/img/pict/bookreport/The_2009_BCG_100_New_Global_Challengers_Jan_2009.gif&imgrefurl=, http://www.bcg.com/

According to Boston Consulting Groups 2009 Report on the top 100 Global Challengers from Emerging Markets:China 36India 20Brazil 14Mexico 7Russia 6Other 17

MexicoPopulation 2009  esta. 111,211,789 (11th) GDP (PPP)2010  Total$1.541 trillionPer capita $15,323GDP (nominal)2010 estimate  Total$1.085 trillionPer capita $10,211

Company Focus: Cemex, maker of cement and ready-mix concrete

http://en.wikipedia.org/wiki/Mexico

Cemex -Worlds Largest Building Materials Supplier started 1906, became international 1992http://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

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.

BrazilPopulation 2009 esta.191,796,000(5th)GDP (PPP)2009 estimate Total$2.013 trillionPer capita $10,513GDP (nominal)2009 estimate  Total$1.574 trillionPer capita $8,220 

Company Focus: Embraer, builder of small regional jets

http://en.wikipedia.org/wiki/Brazil

Embraer -Worlds Largest Small Regional Aircraft Manufacturer started 1969, became international 1985http://en.wikipedia.org/wiki/Embraer

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.

IndiaPopulation 2010 esta.1,188,943,000 (2nd)GDP (PPP)2009 estimate   Total$3.526 trillionPer capita $3,015GDP 2009 esta. Total$1.235 trillionPer capita $1,032

Company Focus: Tata Steel, maker of various steel products

http://en.wikipedia.org/wiki/India

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

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.

Any Questions, Please?

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