Globalisation , the World Economy and MNE's mini - Essay Example

Globalisation, the World Economy and MNEs mini essay Globalisation, the World Economy and MNEs mini essay Emerging markets entails developing nations which were initially poor but are still under the process of development. This means that such countries posses some characteristics of emerging markets. The emerging economies posses the following three basic characteristics; their per capita income lies within a range of ten to seventy five percent, they initially experienced a period of low poverty and finally most of the emerging markets came up as result of globalisation (Hatani, 2014).

Advantages and Disadvantages of entering into the emerging markets There are numerous advantages that may accrue to an organisation by entering into the emerging markets. Some of those advantages that include but not limited to; there is risk minimisation through diversification. This means that investing in foreign market provide organisation an opportunity to diversify its portfolio (In Prasad and In Ghauri, 2004). Further, the company may have access to wider larger market for its products.

This may lead to an increase in its sales volume and profitability of the company (Hatani, 2014). Additionally, entering into an emerging market provide an organisation with an opportunity to exploit more resources than remaining in a single market. Moreover, investing in emerging market provides an organisation with chances for growth and development due to numerous opportunities that could be exploited in the emerging markets (Kozak, Jurzyk, Degryse and Havrylchyk, 2009). On the contrary, entering into the emerging has some disadvantages.

Such disadvantages may include; political risk, unfavourable trade regulations, higher entry cost, stiff competition to mention just but a few. Political risk may be attributed to losses that an investor may incur from tribal wars that are more prevalent in emerging markets. Additionally, emerging markets may possess some unfavourable trade regulations such as unfair taxation policies to the new business entrants. Further, the cost of entering foreign market may be substantially higher whereby small organisation may have limited access to substantial resources required to enter into the emerging markets (Brace, 2010).

The extent to which RIMs strategy for those markets has been successful The Research in Motion Limited has been reported to be among the leading organisations in mobile communication industry. The company has been utilizing research and development strategies to carryout comprehensive market analysis prior making investment into the emerging market. This has enables the company to achieve substantial success in production, distribution and selling of its mobile communication brands. The success may further be attributed to the ability of Research In Motion Limited to analyse cost, risk and returns that they could be experience prior investing.

Some of the success achieved by Research In Motion Limited include; increase in its sales and revenues, ability to expand and to employ large workforce with numerous skills and expertise. In addition, the company has been able to acquire other companies such as Slang Soft Company, a highly developed technological company based in Israel. Further, Research in Motion limited was reported to achieve higherge sale returns of seventy percent. Moreover, Research In Motion Limited was reported to achieve sales revenue of two point three billion dollars in the year ended 31st December 2008.

As part of its success, Research in Motion limited was able to establish research centres in numerous emerging markets. For example, the company was able to establish a research centres in Beijing, Singapore, India, China, United States, and Unite Kingdom, South Korea among other regions. This expansion made Research In Motion Limited obtain higher returns as compared to subsequent periods (White, Rob and Beamish, Paul, 2010). Reference List Brace. (2010).Investment Strategies For and Against Emerging Markets.

Retrieved :< http://www.ft.com/cms/s/0/f769f698-ff0b-11df-956b-00144feab49a.html#axzz30O4XTUOQ Hatani.F. (2014).Globalization, the World Economy and MNEs BMAN 30722: MNEs and Emerging Markets. Manchester Business School. In Prasad, S. B., and In Ghauri, P. N. (2004). Global firms and emerging markets in an age of anxiety. Westport, Conn: Praeger. Kozak, S., Jurzyk, E. M., Degryse, H., and Havrylchyk, O. (2009). Foreign Bank Entry and Credit Allocation in Emerging Markets. Washington: International Monetary Fund.

White, Rob and Beamish, Paul, (2010) "Case 1.4: Research in Motion - Managing Explosive Growth Reading" from Bartlett, Christopher et al, Transnational Management: Text, Cases, and Readings in Cross-Border Management pp.68-85, New York: McGraw Hill Higher Education