Discuss the implications of changing income distribution in EMs for foreign entrants.
What will be an ideal response?
Growth in consumption in EMs is due to economic growth which increases the income levels within these countries. Higher income levels are then translated to the economy as increased demand and a growing middle class. Parallel to the increase in income, consumer expenditure on a variety of goods across industries are changing across EMs. Spending on clothing, housing, household goods and health has increased rapidly throughout these countries.
In developed countries, a firm can market a new product to early adopters and then decrease its price and content to offer it to the majority. In EMs, the income distribution is not smooth (Montiel, 2003). Hence, by simplifying an offering, the company cannot reach the middle income segment because the gap between the middle income segment and the high income segment is very large (Dawar and Chattopadhyay, 2002). Even though middle income consumers in EMs have higher income than they did in the past decade, there is still a wealth gap between the middle income levels of the west and the EM consumers. When multinationals enter these markets with their products designed for the middle income consumers in the West, they can only appeal to the high income customers of the EMs – who constitute only a small percentage of the population. Moreover, middle income populations in EMs do not necessarily have the same preferences as the middle income population in developed economies. Therefore, business models designed for developed economy customers may fail to meet the needs of EM customers both in terms of costs and functionality.
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Which of the following is true of the arbitration framework created by the New York Convention?
A) Signatory countries can require parties to an arbitration agreement to actually use arbitration. B) Signatory countries recognize and can enforce arbitration judgments. C) There are limited grounds for appealing arbitration decisions. D) The grounds that are recognized are different than the typical appeals that are permitted in a court of law. E) all of the above
The operating cycle is the time between the acquisition of inventory and the realization of cash from selling the inventory
Indicate whether the statement is true or false
Lighting Company sold an old machine on December 31, 2011, for $22,000 cash. The following data was available when the truck sold: Acquisition cost $100,000 Estimated salvage value at time of acquisition 8,000 Accumulated depreciation on December 31, 2011, after adjustment 85,000 When this transaction is recorded, it should include:
A) debit of $7,000 to the loss on disposal account. B) credit of $22,000 to the truck account. C) credit of $7,000 to the gain on disposal account. D) credit of $15,000 to the gain on disposal account.
Mary was selling her house. The purchase asked if it had termites and Mary replied in horror, "absolutely not". However, it did have termites
But clever insects that they are, they kept well inside the wood so Mary never saw them and didn't have any idea that they were there. There was no mention of this statement in the contract for sale of the house. Mary's statement is considered in law to be A) an innocent misrepresentation B) a negligent misrepresentation C) a false warranty D) of no consequence because it was not included in the written contract E) of no consequence because she believed that there were no termites and was honestly mistaken