Winning in Emerging Markets - Assignment Example

This becomes avoid because the business cannot make the expected progress in terms of profits. The spaces created in the business require filling thus a business opportunity arises due to the requirement for filling these loopholes (Khanna et al. 15). For instance, it may determine the opportunities for filling the loopholes such as making an upgrading on market institutions (Khanna et al. 16).      2). Transaction costs are a measure of understanding how well the market works. Why?             The costs become a measure because they differ in different markets.

For example, in emerging markets, the transaction costs are high in comparison to those in developed markets. Such a case is evident in Argentina where the process for registration of a business number is higher than in Australia (Khanna et al. 18). In this situation, Argentina is an emerging market while Australia is a developed market. High transaction costs discourage ventures in markets while lower costs motivate business ventures. With high costs of the transaction, inefficiency arises hence capital costs rises.

There are decreased labor and trading requirements due to increased expenditures (Khanna et al. 19). Performing comparisons of utilities involved while buying and selling of goods plus services depicts the market conditions. This provides comprehension of how efficient or inefficient a market works (Khanna et al. 21).