3.7.5- Emerging markets and business Flashcards
What are emerging markets/ economies
describes an economy in the process of rapid growth and industrialisation
What are comparative advantage
The ability of an individual or group to carry out a particular economic activity (such as making a specific product) more efficiently than another activity
What is increased competition
Globalisation means that domestic firms are likely to face more international competition
What are developed or advanced markets/economies
such as UK, USA and Australia have a relatively high level of economic growth and security
What are the BRIC countries
Brazil
Russia
India
Shina
South Africa
Common features of emerging markets (FLTEG,IIP,RI)
-economies making a transition
-rapid industrialisation
-have potential to become developed economies
-faster long-term economic growth
-many inhabitants still in poverty
- businesses struggle to access global markets
What happened to the BRICs
brazil has since entered a prolonged recession
Russia as prolonged recession due to war
China has now become worlds largest economy and in many respects is now a developed economy
India continues short term growth
Perceived business threats from emerging markets (HS-LC L, UVC, IPOB)
increasingly large pool of skilled, but low-cost labour
-undervalued currencies make their exports cheaper
-inadequate protection of brand/intellectual property
-state subsidy of industries to make them more competitive globally
Business opportunities in emerging markets (ed-MC, D, HS-LC L)
Growing numbers of educated middle class consumers
cultural shifts
demand for infrastructure
source of high-skilled but low cost labour
great potential for joint ventures and acquisitions
Key risks and threats of emerging markets (think pestle)
political instability
cultural differences/ sensitivities
variable approaches to financial & legal dealings
corruption and bureaucracy
low cost- production makes developed economies uncompetitive in some markets
How have multinationals led investment into emerging markets
global brands/ increase market share
by definition they need to be active in fast-growing emerging markets as well as having established markets shares in developed economies
Why emerging economies are likely to continue to enjoy high growth rates (U,I,PG, ROMC)
-urbanisation process continues
-industrialisation
-population growth
-rise of middle classes/consumer society
-workforce will continue to improve skills
-technological innovation
