The Economics of Nuclear Weapons
The recent India Pakistan skirmishes have brought the issue of a nuclear Armageddon to the forefront of international politics. The news channels in both countries, as well as the international media, have been discussing the possibility of the situation escalating into an all-out nuclear war. The question of the futility of such a war has […]
Why Young Managers should know about Inventory Operations
When a management student passes out from college and is absorbed into any business organization, if he is lucky he will get to spend a few months in getting orientation in all departments before being assigned to a particular department or function at the end of the induction program. Those who get to be assigned […]
Disaster Recovery and Crisis Management
When we talk about Disaster Recovery and Business Continuity plan for any business or organization, we need to necessarily plan for Crisis management too. Though the objectives of all these plans might vary, they are all interlinked, interdependent and mutually inclusive. In large scale business organizations as well as high technology organizations with large operations, […]
BPI – Introduction to Process Efficiency Measurement
Business Process Improvement projects are extensively used by Organizations from time to time to overhaul their existing processes and operations in a bid to improve the efficiency and effectiveness. In the current situation where intense competition and changing business environment calls for Organizations to keep reinventing themselves and building capability as well as flexibility in […]
Cloud Kitchen: The Newest Innovation in the Restaurant Business
Technology has started impacting all businesses. The restaurant business is no different. Earlier, restaurants used to be low tech and were businesses which were run by moms and pops. However, now restaurants have gone high tech. Several innovations are now part of the restaurant model. The “Cloud-Kitchen” is one such innovation. In this article, we […]
The previous articles in this module have discussed the contours of international business and the key drivers of the phenomenon.
This article discusses how international businesses are affected by the rise of the emerging markets especially the BRICS (Brazil, Russia, India, China, and South Africa) and the next “Breakout Nations” from the second tier of the emerging markets.
The point to note is that ever since the emerging markets opened up their economies and liberalized their procedures, international businesses have found a readymade market for themselves in which they can operate in, make, and sell goods.
Often, it is the case that emerging markets provide the international businesses with the right opportunities to expand and grow further. When considered against the backdrop of falling growth rates in the West, the western multinationals could not have asked for more with countries like China and India opening up like never before.
For instance, the recent decision by the government to push for FDI (Foreign Direct Investment) in most sectors is a step in the direction of benefit to western multinationals.
Though globalization picked up in the 1990s and gathered steam subsequently, the recession following the dotcom bust proved to be a setback to international businesses. Further, the 911 attacks proved to be another obstacle to the expansion of international businesses.
The closing years of the first decade witnesses the 2008 Great Recession, which dealt a decisive blow to international businesses.
In this gloomy scenario, the growth in the emerging markets was the silver lining for the international businesses, which was captured well by experts like Ruchir Sharma in his book, The Breakout Nations, who pointed out that western capital had no choice but to migrate to countries like India and China.
If we look into the future (though predicting the future is hazardous in these fast changing times) we find, the next frontier for international businesses is the tier two emerging economies like Vietnam, Ireland, and African countries.
Without being too optimistic, it is clear that the growth in these markets would drive the expansion plans of international businesses. it is also clear that international businesses can leverage on the demographic dividend that these countries.
To explain the term, the higher proportion of young people in the country’s population is called the dividend that these countries get because of their demography. Hence, with so many young people joining the workforce, it is apparent that the emerging economies offer the best possible means of growth for the international businesses.
Finally, western multinationals have to contend with the international ambitions of emerging market companies as well. in recent years, there has been a trend wherein companies from India and China as well as Brazil and Russia have started to make rapid strides in their expansion plans overseas. Hence, it cannot be said that the flow of capital is unidirectional alone.
In many ways, it can be said that the global economy is now at a stage where it is anybody’s game and hence, the world is indeed flat for those with the innovative edge, hard work, and sustainable business models.
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Cross Border Mergers and Acquisitions and Some Recent Trends in this Field
February 12, 2025
