Developing Global Businesses: Strategies, Opportunities, And Challenges

Expanding Business Activities in Developing Countries

Discuss about the Developing Global Businesses.

The paper presents a brief overview of the global business in developing the market. It explains that how the companies can expand its business activities and operations in developing countries. It describes the various key issues which the companies will have to face while conducting business activities and actions in developing countries. In this era of growing business trade over the countries, companies are showing their vast development. These global businesses have to face various difficulties while the expansion its business in developing countries and they have to put efforts to prove themselves in front of the other markets in order to generate good investment from large firms. To expand their trade business they are recommended to plan proper strategies. It is not easy to think about going in the developing markets. These markets demand a lot from the company which puts pressure on marketing products effectively and efficiently. As there is an evolvement in economies of underdeveloped countries there is a reason for such companies to react enthusiastically. A large number of markets designated under economic growth shows interest. The countries that are developing their trade globally cannot be ignored. They are expanding not only geographically basis rather socioeconomically. The area under development covered by them is a vast area. They have a direct approach to the world’s advanced countries. These global businesses show strong economic performance and also uses advanced technologies to expand their trade. They involve in developing infrastructure and improving healthcare (Dahan, Doh, Oetzel and Yaziji, 2010).

These developing global businesses open the door to foreign investment which allows them to access new capital. This benefits the companies for doing trade in different fields and makes them grow in effectively in emerging markets. It becomes a great opportunity for the companies that trade on small scale in order to get success in such competitive world for economic development. The opportunity to these small businesses provides new services to the consumers more personally by working with companies within the country in order to expand the economic infrastructure of the business. This gives chance to small traders to publically show their branding in the market (Sheth, 2011).

The keys to growing in the world of business are the amount of research work one puts in and the type of strategies planned to make growth and success. The company has to go through many challenges in order to grow in the emerging market. This creates big opportunities for large companies. When the company adapts the use of technology then the emerging of new opportunities could be seen. Hence the growth of global business takes place with the adaptation of new technologies (Peng, 2012).

Challenges Faced by Companies in Emerging Markets

The international economic culture of the company helps in encouraging the distribution of goods and services between the continents largely. The small businesses take advantage of the business opportunities by investing their time and capital in the emerging markets of the country all over the world. The society of emerging markets has a potential and capable labor. This results in greater advantages for the company to establish their trade business in the company (Madawaki, 2012).

Since these markets also consist of upper-class population hence the growth towards business increases demand for new kinds of goods among the society. The consumers show great interest in purchasing more of luxurious items that were unavailable previously. The small business can be benefited from such advantage by accepting the opportunity to provide these products to customers who never purchased them before. The establishing of the brand in emerging market eliminates the chance of competition. The emerging economy can be a fresh territory for the products provided by the company (Hill, Cronk and Wickramasekera, 2013). The company can acquire a good amount of share in the market by being the first one in meeting the consumer’s demand. With the growth towards emerging market company also becomes a part of growing infrastructure. When these small businesses expand themselves in the competitive market it gives an opportunity to take a step in the economic system of the market. The company has to be capable enough to emerge in the economy (Kose, Otrok and Prasad, 2012). The global business in developing countries increases in company growth and success in the new market. This small business that opens later has higher chances of being in the market. The Company diversifies itself rather than operating in one place which more likely becomes an outcome of suffering. Further, the companies face various challenges while conducting business in developing countries. The firm has to bear a lot of losses while deriving the business activities in developing countries. The benefit could only be done by the fluctuated value of operating in business in different currencies. The company gains reputation when it is able to fulfill the domestic demands of consumers. Running business outside the boundaries can raise profits as it becomes easy to reach more and more people (Boso, Cadogan, and Story, 2013).

Global business helps to increase the profit and revenue of the company. In today’s era, economic growth becomes the important weapon for the company. Therefore government intervenes in the business in order to encourage them to develop the business into the private sector. They help the entrepreneurs to enhance their knowledge and skills.

Adapting Technology for Business Growth

Global business is accessed and carried by the entrepreneurs as well as companies. Entrepreneurs generally have poor knowledge about markets so they have to become dependent upon the developing countries. The quality of products is standardized before being sold in the market. The global business that is expanding largely in the market gives access to these entrepreneurs to gain by self-trading in such markets (Narula, 2012).

Global business is advantaged with good legislation that is provided in developing countries. Good legislation results in generating higher revenues and attractive tax and growth in business. They help in building strong administrations for tax and makes the registration procedure for the companies. They meet with the procedures of international law which reduces the risk of loss in the business. They can rely on the official bodies of the country as well as other organizations of developing countries which enable them to work quickly. The improved infrastructure in these developing countries where companies come for trade ensures a good business climate. The improved infrastructure of the country persuades firms to expand their trade. They grow larger with the modern world and understand what a consumer demand. The growth of global businesses in the developing market enhances the way of work and decisions making power. This gives a chance to the companies to prove themselves and gain the trust of their clients. The ultimate aim of the business is to earn profits and fame in the market. So by expanding the trade into other countries, it becomes easy for them to achieve their target (Gourinchas and Jeanne, 2013). 

These emerging and developing countries now adds a good percent to the global GDP.  Since the development, these companies are contributing a large number of percentages which helped them in saving economic job factor. They are the main elements of the reduction in the global poverty. Such disadvantages can overcome for three reasons which have been discussed below (Albert, Werhane and Rolph, 2014).

 

• When the business opportunities from large companies like MNCs explore business in these markets they are recommended to fill those areas which have no significance in the business. Multinational executives operate in the well-developed economy and therefore ill-equipped economic factors have to deal with such empty matters of the company. Western organizations show their presence by relying on data from the marketing firms in order to expand their products and plan developing strategies for competition in the market. These businesses have to count on the partners who are responsible for supplying their products to various customers (Birkinshaw, Brannen and Tung, 2011). When companies think of expanding trade in other countries which do not have researchers from the sophisticated market it becomes difficult for the companies in deploying their models related to the business. Whereas, local company managers are aware of the kind of work institution need to fill their empty spaces which can show a better They already know about the criteria and are familiar with the local context. This helps the company to meet the needs of customers effectively. They are capable of raising money by trading in the local stock market. This increases the reputation of their firms. These mechanisms allow the local companies to effectively compete with foreign trade business (Gaur, Kumar and Singh, 2014).
• Once these companies from emerging markets demonstrate a success degree in business the capital increases mark the growth of talent of these companies in developing countries. They have the chance of raising money by listening to the stock exchange records. They become investors of the developing market and it becomes easy for them in selling the bonds and equity shares. Other companies from developed countries try to fit into the gaps of soft infrastructure. This is because it helps the local businesses in raising the spirit of competition. The various programs of these countries allow emerging markets to hire people who are efficient in the relative skill and possess the quality of working in Multinational Corporation (Leamer and Storper, 2014).
• The large companies alter their strategies before presenting in the developing market in which they do operations. It becomes difficult for the companies to give a modification to their products or services. There should be a proper communication which can suit the taste of locality. The opportunities that developing countries provide are small and have chances of risk. The structure of cost becomes difficult for these business sectors which enable them in selling products of the business at a reasonable price in the market. Local companies are benefited from not having to suffer from such constraints of business. This is because their operation takes place only in few markets of geography. In fact, once the quality of the companies of emerging market improves the quality of products and services supplied by the firms it becomes easy for them to meet the demands of the customers within the company and outside it (Brem and Wolfram, 2014).

The marketing structure in these developing countries different from business to business. Local companies are largely helped by them to fight against their rivals. A global customer demands good quality in the products and expresses the desire of having a global feature in that product. They have to offer the same quality of goods in those developing countries which are ready to pay the prices that prevail across the global. These segments only demand global quality of products which have the local features in them at less than the prices prevailing in the market. These segments demand local feature of the products at local prices (Kumar, Mudambi, and Gray, 2013).

Advantages of Expanding in Emerging Markets

Before emerging to the developing countries generally these companies think about is a success and this success is only gained through the ability to exploit the advantages of the business. In the starting, they take a step into growth by their ability of trading in the foreign investment sector. They try to develop contacts with resource marketers in order to gain competitive advantage. They are able to do so by the knowledge of local production factor that they have. This helps them in serving the customers sitting at home and outside the boundaries in an effective way (Lund-Thomsen and Lindgreen, 2014).

Those businesses that deal with raw materials are used in all areas of retail. This is generally done in order to serve the clients in the market or because they have to as being the part of such chain. It becomes a bit difficult to search for customers. Hence the search for buyers in these emerging markets who can become their source of earning. The other reason relates to the market factors. The different factors of the market that are saturated become expensive. Hence these businesses have to search for other markets of other countries that are developing which provide same resources. at last these sectors increases the values of business by moving up the chain of values which allows selling the branded products by offering solutions of the recess. On the above discussion, it has been analyzed that global business in developing countries will provide a lot of benefits to the companies as well as people. Thus, the companies should analyze and evaluate the market and environment of the developing countries. It should use some effective strategies to gain growth and success in developing countries.

References

Albert, P.J., Werhane, P. and Rolph, T., 2014. Introduction. In Global Poverty Alleviation: A Case Book (pp. 1-11). Springer Netherlands.

Birkinshaw, J., Brannen, M.Y. and Tung, R.L., 2011. From a distance and generalizable to up close and grounded: Reclaiming a place for qualitative methods in international business research. Journal of International Business Studies, 42(5), pp.573-581.

Boso, N., Cadogan, J.W. and Story, V.M., 2013. Entrepreneurial orientation and market orientation as drivers of product innovation Management success: A study of exporters from a developing economy. International Small Business Journal, 31(1), pp.57-81.

Brem, A. and Wolfram, P., 2014. Research and development from the bottom up-introduction of terminologies for new product development in emerging markets. Journal of Innovation and Entrepreneurship, 3(1), p.9.

Dahan, N.M., Doh, J.P., Oetzel, J. and Yaziji, M., 2010. Corporate-NGO collaboration: Co-creating new business models for developing markets. Long range planning, 43(2), pp.326-342.

Gaur, A.S., Kumar, V. and Singh, D., 2014. Institutions, resources, and internationalization of emerging economy firms. Journal of World Business, 49(1), pp.12-20.

Gourinchas, P.O. and Jeanne, O., 2013. Capital flows to developing countries: The allocation puzzle. Review of Economic Studies, 80(4), pp.1484-1515.

Hill, C.W., Cronk, T. and Wickramasekera, R., 2013. Global business today. McGraw-Hill Education (Australia).

Kose, M.A., Otrok, C. and Prasad, E., 2012. Global business cycles: convergence or decoupling?. International Economic Review, 53(2), pp.511-538.

Kumar, V., Mudambi, R. and Gray, S., 2013. Internationalization, innovation and institutions: the 3 I’s underpinning the competitiveness of emerging market firms. Journal of International Management, 19(3), pp.203-206.

Leamer, E.E. and Storper, M., 2014. The economic geography of the internet age. In Location of International Business Activities(pp. 63-93). Palgrave Macmillan UK.

Lund-Thomsen, P. and Lindgreen, A., 2014. Corporate social responsibility in global value chains: Where are we now and where are we going?. Journal of Business Ethics, 123(1), pp.11-22.

Madawaki, A., 2012. Adoption of international financial reporting standards in developing countries: The case of Nigeria. International Journal of Business and management, 7(3), p.152.

Narula, R., 2012. Do we need different frameworks to explain infant MNEs from developing countries?. Global Strategy Journal, 2(3), pp.188-204.

Peng, M.W., 2012. The global strategy of emerging multinationals from China. Global Strategy Journal, 2(2), pp.97-107.

Sheth, J.N., 2011. Impact of emerging markets on marketing: Rethinking existing perspectives and practices. Journal of Marketing, 75(4), pp.166-182.