Emerging Economies and Globalization
Argosy University
October 29, 2013
Emerging Economies and Globalization Multinational corporations (MNC’s) are consistently looking for new unsaturated markets to tap into in optimisms of expanding their business and capitalizing on future industry trends. General Electric Healthcare (GEH) is one of these MNC’s trying to capitalize on the incessantly rising healthcare industry. In 1878, Thomas Edison founded General Electric (GE), which is the corporation that established GEH in 2004. GE was the first company to invent the household light bulb and has successfully ventured forwarded in the electric industry through its innovations and manufacturing of
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The corporation might be excited to find they are utilizing the First-Mover Advantage by moving into an emerging market to set up shop (Kokemuller, n.d.). The company may even anticipate building success by becoming a recognized brand in the industry but there is risk that this can back fire and a second corporation may come in and steal that anticipated success through better innovation and even cheaper product and labor. In addition, the country that is manufacturing the product could decide to make a similar product forcing the other country out.
National Competitive Advantage Hill (2008) describes Michael Porter’s “Competitive Advantage of Nations Theory of posits that within specific industries, clusters of expertise result from highly competitive national environments” (p. 616). Michael Porter created the theory of competitive advantage when he began to realize the economic reality could no longer be explained based on the comparative advantage theory only (Laurentiu, n.d.). The competitive advantage theory is based on several determinants:
Factorial determinants: Porter realized there were other important factors that should be considered besides the classical economic theory of labor, land, and capital such as natural resources, human resources, knowledge, capital, and infrastructure (Laurentiu, n.d).
Demand: “structure of the domestic market which determines the quality level of the goods,” (Laurentiu, n.d., p. 3495), predominant domestic
The American Economy is the most dominant economy in the world and has been one that many countries have tried to replicate. Let’s take a look at how the American Economy is so dominant and why. There are many important numbers to base an economy off of, however, we are only going to look into some of the most vital numbers that really illustrate why the United States is the world’s leading economy. These numbers consist of Gross Domestic Product (GDP), which is the total amount of goods and services produced within a country's borders in a year, inflation, the amount the buying power of the dollar changes, unemployment, the number of people actively looking for a job but cannot find one, and the taxation system, which is how much people
GE Healthcare is a unit of the wider General Electric Company. It has a global orientation, employing more than 46, 000 staff committed to serving healthcare professionals and patients in over 100 countries. It is headquartered in the United Kingdom (UK)-the first GE business segment outside the United States. It has a turnover of approximately $ 17 billion. The headquarters hosts GE healthcare corporate offices as well as finance, sales, global sourcing departments, X-Ray marketing, manufacturing, design and shipping. The finance and sales departments at the headquarters handle GE Healthcare’s high level decisions, but each modality often has its own similar
During the changing of world economy, it is increasingly common to hear the term ‘emerging markets’ and from news and report. In the mid-1980s, the term ‘emerging markets’ was created by the World Bank, and has significant influence on the global business world nowadays (Gwynne, Klak and Shaw 2003). To raise investor’s attention to those developing countries, there are numerous characteristics springing up which are given by researches and economists. However, some of those characteristics are contradictory and it is difficult to give a real definition. This essay discusses the main characteristics of ‘emerging markets’ as defined by the World Bank and economists.
SABMiller and Diageo are two largest beer producer in Africa. ”SABMiller, if combined with its partnership with France's Castel Group, sells roughly 60% Africa’s beer by volume. Diageo’s also expands its operation successfully that Senator Keg, its supercheap beer, is also now number two most popular beers in Kenya. As these giant brewers monopolized Africa’s beer market, it can be said that the market has an oligopoly market structure, and both pursue identic operations, so the market can be labeled as competitive. The interdependence that is happening between both brewers makes the competition happens. As SABMiller produces Impala that is half price from its previous beer Manica, Diageo produces Senator Keg to balance it. Diageo
If That does not favour the company they will invest. In terms of tax planning, companies may find it difficult to expand due to the tax ramifications. Country X (Foreign Country) may have a high tax burden on companies that choose to expand their operations abroad. Other reasons may include the means of advertisement, the start-up costs, and the political market.
The people of those countries will be mad if that company moves out. Since companies have gone global, their officers are also from different parts of the world. Their headquarters are in one place and factories in another. It starts to get hard to tell where the company belongs.
Michael Porter investigated why nations have a competitive advantage in specific industries his findings saw two basic types of competitive advantage that firms could pose low cost or differentiation. If you combine the two types of competitive advantage and allow room for a way in which firm wish to achieve them this will lead to three generic strategies which will achieve higher average performances in industries: cost leadership, differentiation and focus.
In this way, the Fed manages price inflation in the economy. So bonds affect the U.S. economy by determining interest rates. This affects the amount of liquidity. This determines how easy or difficult it is to buy things on credit, take out loans for cars, houses or education, and expand businesses. In other words, bonds affect everything in the economy. Treasury bonds impact the economy by providing extra spending money for the government and consumers. This is because Treasury bonds are essentially a loan to the government that is usually purchased by domestic consumers. However, for a variety of reasons, foreign governments have been purchasing a larger percentage of Treasury bonds, in effect providing the U.S. government with a loan. This allows the government to spend more, which stimulates the economy. Treasury bonds also help the consumer. When there is a great demand for bonds, it lowers the interest rate.
Since the company has established a portion of the industry where competitive forces are weaker, expanding into untapped markets brings along a great risk. Their plan to expand into Africa for instance would cost the company a lot financially and structurally, considering the fact that there is no assurance of business success in this region. They made it in Brazil since the market was well understood. Rather than expanding blindly, therefore, company positioning should be taken into account. The company should consider regions where consumption of their products is high while competition is low.
Throughout the years, the United States of America has endured a very strong economy. Although there have been many obstacles of hindrance such as trade deficits, wars, hostile governments and embargo’s, the economic status of the United States still continues to prevail. Just to name a few, the economy of this country survives on simple commodities such as pork, oranges, precious metals and the productive efforts of its citizens. In this paper, I will not only introduce and discuss the logistics of both the United States and the United Kingdom; I will discuss its key economic obstacles and its economic well being.
Ajaya Tachajanta 2011 General Electric Medical Systems, 2002 Overview GEMS is the world’s leading manufacturer of diagnostic imaging equipment and part of Milwaukee-based GE. It is the leader in MR and CT imaging in all regions. According to Immelt’s strategy, GEMS evolves from taking joint-venture and acquisition as the first step where business’s size is matter. Secondly, Global Product Company (GPC) concept is introduced aiming at cutting cost by shifting the manufacturing activities from high-cost based to low-cost based nations, allowing GEMS to earn more margin. Last but not least, investing in developing marketing and sales organization is emphasized to position GEMS as a more than Equipment Company i.e. to differentiate itself from
Ajaya Tachajanta 2011 General Electric Medical Systems, 2002 Overview GEMS is the world’s leading manufacturer of diagnostic imaging equipment and part of Milwaukee-based GE. It is the leader in MR and CT imaging in all regions. According to Immelt’s strategy, GEMS evolves from taking joint-venture and acquisition as the first step where business’s size is matter. Secondly, Global Product Company (GPC) concept is introduced aiming at cutting cost by shifting the manufacturing activities from high-cost based to low-cost based nations, allowing GEMS to earn more margin. Last but not least, investing in developing marketing and sales organization is emphasized to position GEMS as a more than Equipment Company i.e. to differentiate itself from
In the article “The Competitive Advantage of Nations” Michael Porter describes a diamond shaped relationship of forces that define a country’s potential for being competitive in a specified industry. The four points on the diamond representing the different forces are: factor conditions; demand conditions; firm strategy, structure and rivalry; and related and supporting industries. According to Porter, the four points apply pressure to each other resulting in a national
These factors can be set into five categories: Physical, HR, Knowledge, Infrastructure and Capital Resources (Karkkainen V., 2008). There are two types of factors consist of: basic factors and advanced factors. Basic factors contain labour, basic educational system, raw material and national resources. Advanced factors contain skilled labour, modern infrastructure and highly education. Example about how factor condition influences the global competitiveness of a country; Egypt government develop infrastructure in the last three years such as transport systems, communication, payment system, post and system used to transfer money. Egyptian telecom companies illustrate the diamond. It has a relatively high number of communication engineers per
For any company going out for the foreign market is because of any one out of globalization, reducing tariff all over the world, to increase the market share, saturation of the local market, for getting the economies of scale of production, to use their excess capacity and use the resources where it is available at law cost.