Sunday, October 6, 2019

Evaluate the main factors you would consider for market selection into Essay

Evaluate the main factors you would consider for market selection into an emerging market country of your choice - Essay Example Before a business can fully begin operations in a foreign, a number of options must be explored and entry models developed and adopted that fit the market in question and its dynamics. Emerging economies have been at the centre of the current wave of international investment due to the potential they hold in terms of investment opportunities and the available market. The emerging economies are blocked together form the BRIC block, which has countries such as Brazil, Russia, India and china. India is currently one of the fastest growing economies with significant business potential due to its high population and political stability (Milhaupt, 2008). Table of Contents Executive summary 2 Indian growth and macroeconomics trend 4 Emerging markets entry modes 6 Trade theory and competitive advantage 8 Socio-political, cultural and demographic considerations 9 Conclusion 13 Bibliography 14 Introduction Block and Quayle (B & Q) is a British based multinational with subsidiaries in china, Ho ng Kong and Taiwan where the company offers its home improvement and DIY services. However, as a means of surviving the current economic instability and seeking new markets, the company seeks to open a new subsidiary in India to tap on the enormous potential the country (Kleinman & Hall, 2007). The business must also develop a much informed entry approach into the economy to help resume normalcy faster once the operations begin officially. In this paper, the factors affecting entry into the international market and more specifically emerging economies will be evaluated. This evaluation will majorly focus on the strategies that B & Q should develop in their quest to enter the Indian market (Bihar, 2013). Indian growth and macroeconomics trend The surging growth of the Indian economy has made it quite easier for multinationals and other smaller firms from other countries to invest in the country and tap on the enormous potential the country presents as an emerging economy. Currently, there has been a significant craze in the development of trade ties between emerging economies and firms from developed countries and this has been attributed to the positive trend of such economic blocks. The broadening economic recovery of India has created significant confidence between investors and other international firms and this explains the current surge of multinationals in the country. India has repositioned itself as one of the major international hubs of investments due to its large human resource, available market for goods and services and positive trends towards development (Sathyamurthi, 2012). The country’s growth rate has been on a positive trend heading towards double digit growth index with the international monetary fund placing the country’s growth index at 8.2% in 2011 financial year. The Asian development bank estimate that Indian middle class has the potential of growing from 1.2 million in 2030 to more than 1.4 billion in 2050, a figure that will translate into an increased national gross domestic product (Sathyamurthi, 2012). According to a study conducted by the oxford economics, Indian growth trajectory promises a better future which the multinationals like B&Q can explore to increase their profitability. In 2010, the country’s economic output stood at Rs 67 trillion, a figure that is expected to expand to over Rs 144 trillion in 2020. This, coupled with the positive demographic trends posted by the country depicts a future with a population

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