Assignment No 3

International Business Environment

Date of submission: May 5
Countries classified as emerging market economies are those with some, but not all, of the
characteristics of a developed market.
As an emerging market economy progresses it typically becomes more integrated with the global
economy.
India, Mexico, China and Brazil.
An emerging market economy is transitioning from a low income, less developed, often pre-
industrial economy towards a modern, industrial economy with a higher standard of living.
Emerging market economies can offer greater returns to investors due to rapid growth, but also
offer greater exposure to some inherent risks due to their status.
It is challenging to identify internationalization strategies and to choose which countries to do
business with.
Still, most companies have stuck to the strategies they have traditionally deployed, which
emphasize standardized approaches to new markets while sometimes experimenting with a few
local twists.
As a result, many multinational corporations are struggling to develop successful strategies in
emerging markets.
The problem is due to institutional voids
Companies in developed countries usually take for granted the critical role that "soft"
infrastructure plays in the execution of their business models in their home markets.
But Soft infrastructure is often underdeveloped or absent in emerging markets.
“Hard” versus “soft” infrastructure
“Hard” infrastructure
It refers to the large physical networks necessary for the functioning of a modern industrial
nation.
Example: Roads, bridges, tunnels, signage, street lighting, and traffic lights.
Soft Infrastructure
“Soft” infrastructure refers to all the institutions which are required to maintain the economic,
health, and cultural and social standards of a country.
1. The financial system2.The education system,
3.The health care 4.The system of government,
5.Law enforcement 6.Emergency services.
While we have witnessed significant allocations for the infrastructure sector: 1) overall lack of
investments in organizational development, 2) lack of in-country knowledge management and 3)
adequate planning and coordination with other sector has hindered the sustainability of these
investments.
Companies cannot find skilled market research firms to inform them reliably about customer
preferences so they can tailor products to specific needs
Absence of good logistics companies
Absence of recruiting firms
Because of all those institutional voids, many multinational companies have fared poorly in
developing countries. But, successful companies function very well even in the midst of
institutional voids by adopting right strategies.

Question
You are expected to identify a company which has become successful in an emerging
market economy and give a detailed description of its success story in the emerging
economy.
Note: 1.The assignment is not about the success of a company in a developed market or
developed country.2. The examples given in the PPT or video lecture cannot be included in
the assignment.
The following points should be included the assignment
1. Rationale for expansion into emerging market.
2. Challenges faced by the company in the emerging market.
3. Comment on the strategies/business model adopted by the company in the
emerging market to overcome the challenges.
4. What did they follow? Standardisation, Adaptation or transnational Strategy? (For
details refer PPTs and 3Video Lectures).
5. What is the current status of the company in the emerging market?
6. Any other relevant points.