Emerging Markets: Opportunities and Challenges

Emerging Markets: Opportunities and Challenges

[Name of the Institute]

Emerging Markets: Opportunities and Challenges

Major Threats to the Companies

There are a number of threats a firm faces in the international market. Despite the fact that, the company is a giant company or a local firm firms threats are always present. There are different forms of economic systems including capitalism, socialism, and mixed economy. Capitalism refers to the form of government in which all factors of production are privately owned. This form of the economic system encourages competition among businesses. Socialism is the form of the economic system in which the factors of production are controlled and regulated by the government. Socialism has been divided in to two types including democratic socialism and totalitarian socialism. In democratic socialism, businesses have the freedom of occupation and consumption. On the other side, totalitarianism socialism is completely controlled by the government. Capitalism economy is most suitable for businesses because it encourages freedom and competition. However, it is difficult for businesses to operate in an economy where the government owns and regulates factors of production (Salmon & Tordjman, pp: 15).

The current economic crisis has severely impacted a number of businesses. A number of business enterprises have been shut down as a result of the recession. It depicts that businesses need to adapt their strategies according to the economic environment. The economic downturn requires businesses to downsize employees and cut down cost. Economic environment also influences product prices. Businesses need to set the prices of products according to the buying power of population (Stredwick & Kew, pp: 23).

Political system involves government policies, rules, and regulations. Every country has different political environment that affects business operations and related activities. There are some political environments in which the activities of businesses are supported and encouraged. On the other side, some governments impose strict rules and regulations. Political environment is also likely to influence human resource issues. The issues of labor unions, strikes, and lockouts have a major impact on the competitiveness of businesses.

Political environment also involves the issues of security and defense (Brittin, & Worthington, pp: 19). The presence of political uncertainty has a major influence on businesses operating in the country.

One of the major threats to the company is their dealing in Euro which is fluctuating very often

There is a threat regarding the intensive competition in the market of goods

There is a lot id development on the counterfeit products all over the marketplace.

Based on the SWOT analysis of the company a thorough investigation is made as to why the company is having a downfall. However, on the other hand, based on the strengths and opportunities the following report will cater the company some better advices (Lalita

& Ajay, pp: 501).

Issue of Risk Management Planning for in the Emerging Markets

Companies face a number of financial and currency risks that are beyond the scope of operational risk management. Some of these risks include accounting risks, economic risks, and transaction risks. Currency control risk, especially for countries ...