Running head: AMERICAN COMPANIES AND THE EMERGING MARKETS 1

Emerging Economies and the Emerging Markets

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Introduction

Basically, the emerging economies are those countries that are basically investing more

in their specific productive capacities. The leaders of these particular countries essentially are

developing strategies for integrating free market economies as well as mixed economies. This

new adaptations are characteristically aimed at improving the welfare and quality of life for their

citizens. Thus, the countries are practically industrializing more and therefore creating

employment for their people. Through employment, the people have achieved greater spending

powers that have led to various multinational companies especially American Companies,

investing in these countries. The examples of these countries are such as; Greece, China, Brazil,

South Africa, Korea, Thailand, Poland, Mexico, Korea, Indonesia and Russia.

Various American Companies have invested in these market and some have succeeded

while others have failed. There are of course the dynamics of the emerging markets that have

enhanced their unique nature such that there has been a varying degree of both success and

failure. Thus, the particular strategies as well as the prior market research as pertains the

particular American Corporation investing in by these emerging economic countries, makes for

their failure or success. Defining characteristics of these countries are such that; high volatility

with regard to the social changes, there is lower than the average per capita income that promotes

the rapid undertakings by the leaders of these countries. There is also the factor of slowed

economic growth and development, emerging economies are also very prone to the swings in the

world currency. Finally, the emerging economies in essence offer the potential for growth in all

industrial and economic sectors. Therefore, the utilization of the investing countries of the

various characteristics of the emerging economies basically influences how they succeed or fail

in the venture.
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American Companies Successful in the Emerging Markets

There are various companies that have integrated the unique capabilities of the emerging

markets such that he have been able invest and succeed in the new markets. In essence the

investments in new markets by these companies have essentially taking on the right emerging

markets and they have taken advantage of all the positive provisions of these markets for evident

positive results. There are many American Companies that have fundamentally succeeded in

foreign emerging markets but we will review only three that had the greatest impact on the

global market trends which are; Starbucks, Coca-Cola and Gillette.

1. Starbucks

Starbucks is the largest coffeehouse chain shop in the world. The company opened its

first shop in Seattle in 1971 and was founded by three friends, namely Zev Siegel, Gordon

Bowker and Jerry Baldwin. Basically, all the three friends had a passion for coffee and quality

and thus they had passion for making the company the greatest coffee house in the world. The

Company has enjoyed an unprecented success in the Chinese market and is currently the leading

coffee house in China. Practically, the management identified the market niche in China (Gupta,

2018). Thus, the identification of the Chinese as a population that want to be associated with

brands that portray the upward mobility, success and prosperity was also the first step towards

their success in the Chinese coffee market. There was also the identification of the Chinese

values in community and family that the company integrated in the arrangements to enable these

family or communal gatherings. The company has also utilized the various cultural set up of

progress and status by offering the most exclusive services that have endeared the Chinese
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consumers who love quality. Finally, Starbucks has been able to integrate itself in the market

through the realization of the importance of local partnerships that the company has always

emphasized on. Therefore, the company has been greatly successful in conquering the Chinese as

well as Asian Coffee and tea markets that have made it the premium coffee house for the

Chinese emerging market.

2. Coca-Cola

John Pemberton was the Atlanta born pharmacist who via his Chemical Company known

as Pemberton founded the giant beverage company in Atlanta, Georgia back in 1886. However,

the Coca-Cola name’s trademark was chosen by his then bookkeeper Frank Robinson. The

Company’s success in the emerging markets has been influenced by the identification of the

prevalence of disposable incomes in these emerging economies and thus investing in the

countries such as in Africa, Asia and Latin America. Coca-Cola has maintained its success in the

emerging economies through upkeep of the fuzzy drinks spearheaded by coke and maintaining

an aggressive campaign in the new markets. There has also been the programs of rapidly

enhancing and scaling how the zero sugar portfolio is available in the emerging markets (Tang,

2018). This has enabled the company to be able to overcome the challenge of low sugar shortage

for instance in Latin American Countries. Thus, the beverages are always available in the

markets despite the sugar shortages. Essentially, the strategy or marketing model the company is

executing in these countries is that of ensuring that the products are affordable, ensuring the

basics model are maintaining the traditional long-term goals for the company. Hence, the

company is flexible to the rapidly changing markets of the emerging economies. Thus, the long-

term market goals are maintained through the market share and ensure the Company’s growth

rates are solidly aligned to the volatility of the emerging markets.

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3. Gillette

Gillette is a safety razor that was founded in 1901 by King C. Gillette. The Company is

based in Boston, Massachusetts. It was merged I the year 2005 into P & G and stopped supplying

the various products that it was supplying under its parent name, Gillette Company. The

company as bee able to venture and dominate the Indian market through strategically introducing

products that are easily cleaned and are also cheaper (Tiwari, 2018). There has also been the

introduction of Gillette guard to be used after shaving that has enabled the company maintain its

safety model of business. Advertisements of the Gillette brand has maintained the traditional

marketing strategies. Through the use of the various Bollywood stars the larger public population

has been able to identify with the Company and thus has kept as the dominance safety razor

Company of choice in India. Finally, the company has maintain a great social media presence in

India and thus has benefitted through the increased use of diverse social media platforms that

reach larger consumer bases in the way of marketing.

American Companies that Failed in the Emerging Markets

Some American companies have however, failed in their trial to invest in the emerging

economies. These companies particularly failed in their identification of the right markets as well

as in their utilization of the diverse provisions of the particular emerging economies. Therefore,

the specific strategic investment plans did not succeed in the foreign emerging markets. There

are many American Companies that have failed in foreign emerging markets but only three that

unexpectedly failed are reviewed. These are; eBay, Google and Walmart.
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1. eBay

EBay is an American company founded by Pierre San Jose Omidyar in September 1995

in his living room. Despite eBay evident success in various countries, the company failed terribly

in China. Basically, the main failure was based on its particular entry into the Chinese market.

For instance, the Company did not consider the unique cultural aspect of the Chinese people. The

model of the Chinese was based on the interpersonal relationships that were premium and high

quality in their nature. Unfortunately, the company made their entry based on their inherent

Americanization strategy. They were aggressive and tried to buy out all advertising space to keep

out their competitors such as Alibaba and TaoBao (Li, 2019). EBay had aimed at the aggressive

competition practiced by American markets but lost in the identification of the unique needs of

the Chinese consumer. Therefore, its competitor TaoBao developed the needed tools and

structure to enable it stimulate the ideology of “swift guanxi” in relation to stimulation of close

personal relationships with the sellers and buyers of TaoBAo. In essence when EBay failed to

create a bond with the Chinese consumer it was destined to inevitably fail and that is the main

reason the company is overwhelmingly successful in America but failed to impress the Chinese

market.

2. Google

Larry Page and Sergey Brin were college mates who met in Stanford University in 1995

while studying for their PhDs. They founded the Google Inc. Company as they endeavored to

find the ways that they can organize data sets that were very large. Basically, Google had failed
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to research extensively on the dynamics of the Chinese usage of the internet. Despite its earlier

success when it first launched in the Chinese market back in 2000, the Company by the year

2005 had been overtaken by Baidu. Essentially, the Company had failed to effect the censorship

laws and regulations that the government required for it’s to operate in China (George, 2015).

Thus, the clients of Google experienced extensive delays influenced by the Company’s

censorship wars with the host country. Therefore, this brought down its market share and

eventually influenced the departure of Google from the Chinese market. If the Company has

planned in advance the most effective tools to enable the censorship of the Chinese governments,

the Company would have succeeded in this emerging market due to its more advance

technological structure and model of working.

3. Walmart

Walmart is headquartered in Bentonville, Arkansas. The Company comprises of grocery

stores, discount department stores and hypermarkets. It was incorporated in October 31 st 1969

but had been founded in 1962 by Sam Walton. Various names are used for the Company in its

diverse markets across the world. However, despite the Company’s success in America and other

Companies it has failed in various emerging economies for example Japan (Hunt, 2018). The

market system of the Japanese consumer was not well researched before the company invested in

the emerging market. For instance, the Japanese buy in small quantities unlike the Americans

and this affected the overall revenue turnover for the company. There is also the fact that the

Japanese have yet to accept the concept of super all inclusive retail stores. There is also the

tendency of regarding high prices to be the acknowledgement of quality in Japan. Another factor

was the cultural preference of fresh food by the Japanese consumer. Finally, the disposal of

waste is very costly in Japan and thus the Company found its major portion of revenue going to
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waste disposal. Thus, these factors combined to effectively lead to the failed venture of Walmart

in the Japanese market.

Conclusion

In conclusion, the emerging economies have their unique characteristics in the way of the

particular consumers and governments laws and regulations. Therefore, for Companies to

successfully venture in these markets, they have to adequately research on the cultural norms and

markets trends of these economies. Thus, they are prepared in all aspects of the rapidly changing

markets so that they can profit from the increased revenue and need for growth prevalent in

emerging economies.
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References

George, J., & Anandkumar, V. (2015). Branding in China: Lessons from the foreign brand

success and failure stories. Available at SSRN 2695066.

Gupta, P., Nagpal, A., & Malik, D. (2018). Starbucks: global brand in emerging

markets. Emerald Emerging Markets Case Studies, 8(4), 1-22.

Hunt, I., Watts, A., & Bryant, S. K. (2018). Walmart’s international expansion: successes and

miscalculations. Journal of Business Strategy, 39(2), 22-29.

Li, F. (2019). Why Have All Western Internet Firms (WIFs) Failed in China? A Phenomenon-

Based Study. Academy of Management Discoveries, 5(1), 13-37.

Tang, C. S. (2018). Socially responsible supply chains in emerging markets: Some research

opportunities.

Tiwari, R., & Prabhu, J. (2018). Soft power of frugal innovation and its potential role in India’s

emergence as a global lead market for affordable excellence.