Information Technology as Driving Force for Innovation
Introduction Last two decades have seen great stride in information technology. The development in information technology has changed the way business is getting conducted. One of the striking points about information technology is innovation. Information technology has been a driving force for product, service and process innovation. Innovation in Last Decades It has brought forward […]
Voice of Customer (VOC)
The Voice of Customer is not a tool that is used in Six Sigma process. It is the underlying philosophy of the Six Sigma process which makes it ensures that the entire process improvement exercise is based on the need of the stakeholder group that matter most i.e. the customer. The Voice of Customer is […]
Disaster Recovery and Business Continuity Planning Concepts
In the business world today, every customer expects Organizations to walk the talk. Being sensitive to customer expectations and to ensure that the business operations are not hampered due to any reason, organizations have begun to take the concepts of Disaster Recovery and Business Continuity plans seriously. The concept of Disaster recovery is of prime […]
Criticisms of Globalization: Growing Income Inequality
More Losers than Winners The previous articles in this module covered the topic of globalization in depth. Some of the points of discussion were about how globalization has succeeded in lifting millions of people out of poverty. While accepting this fact, it is also the case that globalization has created income inequality which when coupled […]
The Motorola Six Sigma Story – Birth of Six Sigma
No understanding of Six Sigma is complete without truly understanding where it came from – Motorola. The backdrop of the story shows how Six Sigma implementations changed the way Multi-National Corporations conducted operations worldwide. It started in 1981. Motorola like most American companies was reeling under the threat of Japanese competition. Recovering from World War-2, […]
The previous articles in this module have discussed the contours of international business and the key drivers of the phenomenon.
This article discusses how international businesses are affected by the rise of the emerging markets especially the BRICS (Brazil, Russia, India, China, and South Africa) and the next “Breakout Nations” from the second tier of the emerging markets.
The point to note is that ever since the emerging markets opened up their economies and liberalized their procedures, international businesses have found a readymade market for themselves in which they can operate in, make, and sell goods.
Often, it is the case that emerging markets provide the international businesses with the right opportunities to expand and grow further. When considered against the backdrop of falling growth rates in the West, the western multinationals could not have asked for more with countries like China and India opening up like never before.
For instance, the recent decision by the government to push for FDI (Foreign Direct Investment) in most sectors is a step in the direction of benefit to western multinationals.
Though globalization picked up in the 1990s and gathered steam subsequently, the recession following the dotcom bust proved to be a setback to international businesses. Further, the 911 attacks proved to be another obstacle to the expansion of international businesses.
The closing years of the first decade witnesses the 2008 Great Recession, which dealt a decisive blow to international businesses.
In this gloomy scenario, the growth in the emerging markets was the silver lining for the international businesses, which was captured well by experts like Ruchir Sharma in his book, The Breakout Nations, who pointed out that western capital had no choice but to migrate to countries like India and China.
If we look into the future (though predicting the future is hazardous in these fast changing times) we find, the next frontier for international businesses is the tier two emerging economies like Vietnam, Ireland, and African countries.
Without being too optimistic, it is clear that the growth in these markets would drive the expansion plans of international businesses. it is also clear that international businesses can leverage on the demographic dividend that these countries.
To explain the term, the higher proportion of young people in the country’s population is called the dividend that these countries get because of their demography. Hence, with so many young people joining the workforce, it is apparent that the emerging economies offer the best possible means of growth for the international businesses.
Finally, western multinationals have to contend with the international ambitions of emerging market companies as well. in recent years, there has been a trend wherein companies from India and China as well as Brazil and Russia have started to make rapid strides in their expansion plans overseas. Hence, it cannot be said that the flow of capital is unidirectional alone.
In many ways, it can be said that the global economy is now at a stage where it is anybody’s game and hence, the world is indeed flat for those with the innovative edge, hard work, and sustainable business models.
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Cross Border Mergers and Acquisitions and Some Recent Trends in this Field
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