Discuss the factors that firms need to consider in researching EMs.
What will be an ideal response?
In emerging markets, the limited availability of information as well as the reliability poses challenges in analysing the markets. Multinationals are accustomed to operate in environments where reliable information related to the consumers, competition, suppliers and distributors is easy to access. Moreover, in their home economies, they are able to benefit from the expertise of intermediaries which provide information as well as analysis such as market research firms. In contrast, information is not readily available in emerging markets and may sometimes be inaccurate. Even when the information is available, it may prove to be misleading if the analysts interpret the data with the assumption that the market structure is the same as their own. In their analysis on emerging markets researchers need to (a) consider additional factors stemming from the differences in the environment which can affect the firm’s business and; (b) understand the emerging market environment and interpret data accordingly.
In analysing the figures for emerging markets, understanding the background of these figures and the driving forces in the economy is essential. Not only may the figures be inaccurate but also the measurement concepts may be different or the figures may be influenced by seasonal effects. Thus, looking at the numbers without considering the market, its structure, and the forces that affect it may lead to erroneous conclusions (Pacek and Thorniley, 2007).
Analysing inward and outward investment flows can help understand the market. For instance if a current account deficit is large but the foreign investment flows are significant, the deficit may not indicate a serious risk as foreign income can enable the country to reduce the deficit. Alternatively, if the government is able to borrow at acceptable rates, then the budget deficit may not be a significant risk. In contrast, if the country has a history of dealing with the budget deficits by printing money or the country has no sources of funds such as access to international loans or export capability, rising budget deficits can lead to high inflation. Foreign investment flows also signal the structure of the economy and its vulnerability in the face of external shocks. An economy heavily dependent on a few export or import items is more likely to be affected by external volatility. Similarly, if the foreign flows are dependent on a single country, then the market is bound to be affected by any change in that country (Pacek and Thorniley, 2007).
Factors such as skills and flexibility of the population or available infrastructure and level of technology influence business activities. However, before looking at the data, it is important to determine which characteristic of the economic environment is relevant for a given business. For instance, a producer of fine food products may define the economic system as population size and age structure, disposable household income, level of urbanization, climate, transportation, and communication.
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In order to improve social media marketing performance, digital marketers typically track selected metrics on a daily, ongoing basis through some form of social media marketing ________.
Fill in the blank(s) with the appropriate word(s).
Maximization of shareholder wealth
A) provides benefits to society as scarce resources are directed to their most productive use. B) is not a practical goal since it cannot be measured effectively. C) is achieved only if cash flows exceed accounting profits. D) represents a zero sum game in which one corporation gains at the expense of others.
Portofino Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products:Activity Cost PoolsActivity RateSetting up batches$79.50per batchProcessing customer orders$71.31per customer orderAssembling products$7.06per assembly hourData concerning two products appear below: Product KJ22 Product KL37Number of batches69 12Number of customer orders20 9Number of assembly orders492 697How much overhead cost would be assigned to Product KL37 using the activity-based costing system?
A. $5,562.61 B. $6,516.61 C. $1,595.79 D. $10,385.22 E. $5,874.82