Emerging Business Themes

Read Complete Research Material

EMERGING BUSINESS THEMES

Emerging Business Themes



Emerging Business Themes

Introduction

World economic crisis showed in a dramatic way to what extent economy has become globalized. Financial markets as well as markets of products/services have become increasingly interrelated, and it can be said that they have become global as well. For that reason, leading economists started raising a number of issues: Do companies that have been global from markets fear economic impacts of globalization. The situation is even more striking when condition of world economic crisis are taken into consideration.

Within developed market economies, people fear the impact that the globalization of business operations might have on their job security, salary and standard of life, especially in situations of constant penetration of companies from the emerging markets. On the other hand, people from the emerging markets, such as Brazil, India, China, Russia, Eastern and Central Europe fear the so called homogenizing effects of globalization considering it as the danger not only for their economy, but also for their culture, customs and tradition [2, p. 9].

However, this fear of developing countries proves to be groundless for at least two reasons. First, globalization offers opportunities for all companies, and not only for low-cost ones. In the latter case, all business operations would flow only in one direction - towards the countries that manage to reduce the cost of their products through low input costs. Second, greater global integration brings about greater differentiation. Added economic value will go to the ones who come up with unique offer, with something that makes them special.

Regardless of the impact the economic recession caused to big multinational companies and the issues it raised on globalization and its influence on recession, the struggle of companies, including the ones from the emerging markets, to globalize their operations is still under way. FDI are still regarded as the strongest mechanism of the economic growth, international partnerships and acquisitions grow as well as outsourcing, and companies increasingly turn to customers from developing countries. However, beside the fact that economic recession affects the companies from developed and developing countries in a different way, responses of the companies to those challenges differ as well. For that reason, new trends in the development of world economy appear, as well as the ways in which the companies from developed and developing countries cope with those trends and challenges.

Present big economic crisis brings about changes that are related to the role and influence of developing countries, i.e. of emerging markets on global economy. These changes can be presented in three ways [3, p. 131]:

Firstly, developing countries are becoming big and significant markets of products/services. Not only is their rate bigger than the growth rate within developed market economies, but also their participation on the world products market will be greater when the recession is finished than it was when it started.

Secondly, role of governments in the economic development of these countries is bigger than it is in developed market ...
Related Ads