Critically Assess the Opportunities and Challenges of Emerging Market Multinational Enterprises (Emmes) When They Internationalise Into Developed Markets

2011 Words Oct 22nd, 2015 9 Pages
The trick is to learn to innovate and manage quality while remaining nimble.(John Jullens) In just a sentence, John Jullens explains the key to success when Emerging Market Multinational Enterprises internationalise, and how the flexibility and innovation associated with EMMEs is exactly why they have what it takes to take over the world, per say. Whether they are moving reactively, or proactively, EMMEs have the advantage over many developed markets due to the opportunities that are presenting themselves in recent times, such as having a new market to target, having access to a cheap and skilled workforce, and possible partnerships in the new country. But with these opportunities, come great risks and challenges, such as competition, …show more content…
Economic Openness, which saw the breaking down of trade barriers, and a shift towards economic liberalization, with governments integrating their policies towards certain trade agreements, allowing multinationals to export and invest in FDI’s in their countries, leading to more economic growth.
Expansion strategies by Multinationals, with many of these enterprises reaching out to emerging economies to perform many of their activities, taking advantage of their raw materials, low labour costs and capital.
EMMEs then began to export to these developed economies and with this transition comes a complete contradiction to Economic Theory, which should be seeing richer countries exporting to poorer ones, and the flow of FDIs flowing similarly in the same direction, and with it, a high level of managerial and entrepreneurial skill. (http://www.economist.com/node/10498492&arubalp=4660316c-3d2b-47c5-bdca-f894fb2d6b)

With these trends, and the way the market is turning, many opportunities are presenting themselves for EMMEs. One opportunity is having a completely New Market to target their products at. Initially, you would look at minimising the psychic distance, by internationalising into markets 'similar' to that of their own (psychic distance reference), sequentially targeting

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