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Understanding emerging markets
1. 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
2. Emerging Market Definition
“Emerging markets are
countries such as
Brazil, China, India, Me
xico, and Turkey
that, in contrast to
advanced
economies, are
experiencing rapid
economic
growth, industrializatio
n, and modernization.”
-Cavusgil, Knight, Riesenberger
Currently there are about
28 Emerging Markets in the World
http://en.wikipedia.org/wiki/Emerging_markets
3. 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
Be Aware: New MNE Global Challengers
…coming for your market share
5. According to Boston Consulting Groups 2009 Report on
the top 100 Global Challengers from Emerging Markets:
China 36
India 20
Brazil 14
Mexico 7
Russia 6
Other 17
Taking A Closer Look at
Three Emerging Market MNE’s
http://www.google.com/imgres?imgurl=http://www.bcg.com.cn/en/img/pict/bo
okreport/The_2009_BCG_100_New_Global_Challengers_Jan_2009.gif&imgrefur
l=, http://www.bcg.com/
6. Mexico
Population 2009
esta. 111,211,789 (11th)
GDP (PPP)2010
Total$1.541 trillion
Per capita $15,323
GDP (nominal)2010 estim
ate Total$1.085 trillion
Per capita $10,211
Company Focus:
Cemex, maker of
cement and ready-
mix concrete
http://en.wikipedia.org/wiki/Mexico
7. 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.
Cemex -Worlds Largest Building Materials
Supplier started 1906, became international 1992
http://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
8. Brazil
Population 2009
esta.191,796,000(5th)
GDP (PPP)2009 estimate
Total$2.013 trillion
Per capita $10,513
GDP (nominal)2009 estim
ate Total$1.574 trillion
Per capita $8,220
Company Focus:
Embraer, builder of
small regional jets
http://en.wikipedia.org/wiki/Brazil
9. 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.
Embraer -Worlds Largest Small Regional
Aircraft Manufacturer started 1969, became
international 1985
http://en.wikipedia.org/wiki/Embraer
10. India
Population 2010
esta.1,188,943,000 (2nd)
GDP (PPP)2009 estimate
Total$3.526 trillion
Per capita $3,015
GDP 2009 esta.
Total$1.235 trillion
Per capita $1,032
Company Focus:
Tata Steel, maker
of various steel
products
http://en.wikipedia.org/wiki/India
11. 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.
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
