International business Essay Example | Topics and Well Written Essays - 2500 words - 1

International business - Essay Example In the past, MNEs were contented with the surplus they earned from doing business in the developed world markets and other selected countries. However, with the saturation of these economies, global business organizations have come to the realization that there is a need to venture into emerging markets which provide new opportunities. The emerging markets have a huge demand base for products that were hitherto unavailable to them coupled with large populations with significant purchasing power. In consideration of these unique features, the emerging markets have come to be regarded as fitting and dependable suppliers of an array of goods and services. Despite the existence of a huge economic potential, the MNEs are continuously faced with various risks and challenges unique to these emerging markets. MNEs and other global business organizations therefore, have to formulate alternative strategies in order to remain successful in emerging markets and maintain their existence in the gl obal arena. ... These unique approaches that may differ from the ones these MNEs employ in the developed world markets enhance the techniques of global strategic management. The success of champions in emerging market economies has shown that these multinationals clearly understand the emerging market environment in which they operate, paying them huge dividends on the innovative strategies they are able to formulate. The existing successful multinationals have also indicated that they understand the chemistry and the psyche of consumers in the host country, enabling them to target a broader market instead of focusing on a fortunate few (Upadhyay, 2007). Moreover, the highly successful MNEs have built considerable distribution channels that utilize a highly advanced distribution strategy with the aim of reaching a bigger percentage of the population. In the process, these firms have been able to build their brands, establish reputations, and create an image that neatly merges their overall global st rategy with local consumer preference and ensured satisfaction. Owing to their discretion and highly developed strategic approaches, MNEs such as Unilever Group, Coca Cola, LG Electronics, GE and IKEA have shown remarkable success in emerging markets such as India, China, Brazil and Argentina (Upadhyay, 2007). The examples above provide evidence showing that in order for MNEs to be successful in their pursuit of globalization and the quest to remain globally competitive in emerging markets, they need to come up with unique strategies that take into account an understanding of the host country’s psychological trends and choice patterns. In addition, it is imperative to note that emerging markets consumers