Emerging Markets: Characteristics, Challenges, And Opportunities Essay.

Discussemerging markets and its characteristics.

Identifyand understand the main differences and similarities that characterize emerging economies.

Understand and analyze the challenges and opportunities presented by emerging economies.

Identifythe institutions of emerging economies that are relevant to managers and understand how they work.

Examinehow low-cost innovations take place in the emerging markets.

Explore distinct strategy options for emerging economies.

Assessingthe risk encountered by firms operating in emerging countries.

Developentrepreneurial and cross-border business strategies for the multi-level emerging markets.

Analyze the additional ethical challenges and issues of social responsibility common in emerging markets. 

Key words

Globalization can be categorized as old globalization and new globalization. The old globalization has witnessed the emergence of China into the world's factory. However, scenes have changed again with the next phase of globalization has arrived. The major reason behind this fact is the growing emergence of new technologies and the emergence of new MNEs. Emerging nations have become the new hub for a business relationship. MNEs are heading towards emerging countries because of many reasons. Emerging nations are being targeted for it offers cheap labor and raw material costs. As per a forecast made by McKinsey Global Institute, a close to 45% of billion dollar plus companies will have their base in emerging countries (Yale Insights 2018). By the end of the decade, more than half of the total world population will have access to the internet (Yale Insights 2018).  

The above section gives an introduction to what a few of changes are taking place in a globalized business environment. Due to the emergence of globalization, there are large-scale innovations taking place in the market. However, it has to be noticed that the benefits of globalization are not being used by all the industries in the same way. There are some industries that have already been able to internationalize themselves like the Uber. They have been able to utilize the effects of the globalization in the best way possible (Velthuis & Curioni, 2015). They have been able to enter into the Global market in a very apt way.  

They have been able to develop and maintain the correct form of technology in order to make sure that they get a good hold over the world market. They have able to enter about 80 countries within the span of just six years. The companies from the Asia Pacific regions have been able to utilize the impacts of globalization in such a positive manner mainly because of the fact that they have the exact amount of expertise that is needed for the purpose of flourishing in the Global market. However, there are some problems that are arising in the Global market as well. The companies that already exist like the incumbents might face a challenge as they are still sticking to the old models of globalization. This assignment has mainly dealt with the analysis of the different impacts of Globalization.

Globalization, can be defined as a process that creates opportunity to people, companies, and government to interact, and integrate with that of the others. It is a process that is being facilitated and driven by foreign direct investment (FDI), information technology, and international trade. It has an influence on the environment, the culture, the economic development, and the political systems (Globalization101, 2018).  

Dragon Multinationals, these are the organizations that have contributed to a change in the global business. It now appears as if these companies have understood globalization better than the existing multinational corporations (Mathews, 2006). These firms have emerged to be one of the preferred choices for customers, suppliers, and investors. Customers, for example, have found “Acer’s Laptops” as a good buy within their budget. It is to be noted that Acer gives tough competition to many biggies in terms of laptops’ selling. These biggies include but not limited to like Samsung, Sony, and Compaq etc. (TechRadar, 2018)

Dragon Multinationals

Accelerated Internationalization, can be considered to be related with latecomers or newcomers. These latecomers have reached to the global platform in time less than what is being consumed by many established and reputed MNEs to do so. However, in other way, newcomers do not follow an incremental internationalization. Indeed, Triad MNEs and Incumbent MNEs do follow this. Triad MNEs, and Incumbent MNEs actually follow a sequential process such as adding one after another global market to its domestic business (Benson-Rea et al., 2016). However, Dragon Multinationals have been different in this regard. They are intended to pick up what is required to become a global company. Each move can be seen as adding another feather in the wing of international expansion.

Organizational Innovation, can be seen as a common thread between several latecomers and newcomers. These organizations have shown that they wish to operate at the global platform from very beginning of their business. It can be seen in largely unconventional worldwide cellular clusters. This can also be viewed in integrated global operations such as Ispat. In all these cases, these firms began with a global outlook. They constantly relied on innovation to get established and deliver the business of international level. For example, Acer did strive to promote and facilitate the company as a semi-autonomous businesses. By doing this, the company was able to create a global cluster where there will be limited issues concerning a coordination with subsidiary branches (Globalbrandsmagazine, 2018). It is to be noted that communication with subsidiary branches has by and large remained an issue with multinational companies. With this, Acer was able to implement a common set of rules and regulations following which decisions were made at each headquarter branches with little or less complexity. Acer did not just use this strategy to provide it a symbolic point of reference but also as a marketing stunt.

Strategic Innovation, was another essential key that helped latecomers to earn a recognition in the crowd of established biggies. These and many others had needed to explore their capabilities in innovation to be able to gain a spot among reputed organizations. They had done it so. They could do it by offering contract services, forming strategic alliances and joint ventures, and licensing new technologies (Ghezzi et al., 2015). It was more because of these complementary services that newcomers were able to create their own identity and soon became one of the leading names in their respective industry. This can be said that to be so internationally placed in a globalized world is a unique advantage.

The purpose of this paper is mainly to analyze how the newly arising companies were able to develop themselves as one of the leading companies of the Global market. The term Dragon Multinationals (Mathews, 2017).” is mainly used to refer to the group of companies that have risen from the Asia Pacific region. The companies like the Acer, Ispat, Li& Fung and others (Baylis, Smith & Owens, 2017). These companies belong from the Asia Pacific regions have been able to find their places within the huge competition as they have a brilliant strategy and technological setup. Thus, one of the basic purposes of this assignment was to see how these companies from the Asia Pacific regions are being able to prosper on the long run in this age of Globalization (Giddens, 2018). In other words, the purpose is to assess if the globalization model or the strategies used by the Dragon Multinationals is correct or not. Thus, it can be said that the purpose is to find out the effects of Globalization on the overall economy and also on the individual organizations. The only way in which the companies can survive the effects of globalization are equipping themselves with knowledge and skills. The purpose of the paper was to see how the companies at the periphery have a high tendency of moving into the center. None of the organizations are staying back and are trying their level best to acquire the technology. The other purpose of this paper was also to see the impending risks that the companies at the center might face from the newcomers or the latecomers. These new and evolving firms made constantly upgrading themselves and moving into the center, thus there is a huge chance of competition arising in the market.

Accelerated Internationalization

The other purpose of the paper is to see the impending risks that the companies might face due to the arrival of the Globalization. This is because the companies that already exist in the market particularly termed as incumbents might find it tough for to develop themselves. They are likely to face a very tough competition from the latecomers or the new firms in the market. There is a rising pressure from the boundaries or the peripheries because of the Globalization. Due to the upcoming trends in the global or the International market, the firms from the periphery have a high tendency of moving into the center. This is likely to have some impacts on the economy and the individual companies as well. On one hand, this might have a positive impact on the company as a whole. This is because they will be able to generate a good source of income for some of the people who are engaged in the sectors like the steel production, contract manufacturing, hotels, financial services and others (Donati, 2017). The positive impacts of the Global economy can be seen from the fact that the later and the newcomer's firms have been able to utilize the new and innovative strategic and organizational innovations.

On the other hand, there is the chance of some negative impacts on the economy as well. The resources of the economy are being consumed at a very rapid rate. For an instance, China was suffering from the increased use of coal and this was an alarming fact. Due to the increasing amount of Globalization, the companies are using up more amount of resources. This, in turn, can create a huge stress on the production of the individual company and the economy as a whole.

• To identify opportunities in particular the challenges for the global business in the 21^stcentury
• To identify the possible shift in globalization in the 21^stcentury
• To understand the business needs that required to be fulfilled by both newcomers, and latecomers

The first objective will try to inspect opportunities and challenges for the global business in the 21^st century. Both old and new globalization has witnessed industrial revolutions, which impacted the way of doing the business, and the consumer behavior.

The second objective identifies the possible shifts, which the new globalization will bring to the global business. For example, supply chain networks were more in physical form during the old globalization. However, this will now witness a big shift as physical networks will start converting into Industry 4.0. It means the network will have devices, companies, and consumers.

The third objective is about understanding the strategies needed by both old and new players of globalization in the 21^st century. It is to be noted that new players of globalization have performed much better than the old. However, both old and new players can face challenges from a shift in manufacturing, and other business processes.

Figure 1: A Roadmap Showing the Entire Report Journey 

Figure 2: A Roadmap Showing the Key Words being used

Globalization is the most prominent and the dominant technology that is present in our time. This is mainly helping the industries to utilize the latest amount of technologies and innovations. In other words, it can be said that Globalization is the concept that brings into play a large number of new technology in the field of financial systems, trade liberalization and other such aspects. However, there can be problems due to the Globalization as well. This is mainly because of the fact that the already existing companies operating at the center are at a risk as the companies from the peripheries can start moving towards the center.

Organizational Innovation

The main aim of this assignment was to see how the Dragon multinationals are using the different strategies to overcome their problems. Though they have moved forward in a very strategic manner, there is a chance that the resources might be finished up at a very rapid rate. The old globalization has witnessed the emergence of China into the world's factory. However, with the passage of time, it has been seen that China has also joined the World Trade Organization in the year 2001. It was seen that the coal consumption of China was increasing rapidly in the year 2002. It was naturally creating a huge stress on the coal reserves of China. It was for this reason that there was a sharp rise in the total coal consumption in the world. One of the problems is that the Globalization often shifts the jobs and the well-paying professions from the developed countries to the less developed countries.  

It is both good and bad at the same time. This is because the centers or the less developed countries will develop but at the same time, the employment opportunities from then centers are decreasing.  This is mainly because of the fact that there is a fear of the companies or the organizations at the periphery moving closer towards the center. This will indeed turn out to be a very alarming situation. The newcomers or the new firms have the best quality expertise present with them. As for instance, the Dragon multinationals do not have a good amount of skilled labor, abundant resources or other such facilities. For an instance, the newcomers like Acer, Ispat, Uber have gained a huge amount of importance in a very short period of time. This shows that they have a very well developed market penetrating strategy.

This can also be understood the fact that a large number of jobs are shifting from a high-cost structure re shifting to the less developed economies having a lower cost structure. All the jobs are shifting from an OECD country like the United States. One of the problems is that Globalization has not yet received a good attention from all the parts of the Globe. As a result of this, the periphery or the organizations at the periphery can gain an advantage over the companies at the center. There is also the chance that there can be a shift in the pattern of investment. As Globalization increases, the newcomers or the latecomer companies are moving towards the center and are becoming make competitive in nature. The investors will naturally like to invest in those firms that can provide them with higher rates of returns. Thus, the level of investments in the already developed companies in the periphery is likely to decrease.

According to Gilpin (2018) in the recent volatile business environment, globalization is acting as a driving force that is being imposed on the corporate entities and thereby leading them to gain unique business related ideas. Rapid development of globalization is playing a major role in ensuring free flow of ideas, both human and monetary resources along with products and services, which is very much needed for the integration of economy and society. As the outcome of promptly emerging cross-border trade, condition of world economy is being strengthened in a drastic manner. In addition to that, Wunderlich (2016) stressed on the ground that globalization also ensures free flow of international capital, which is the key of accelerating global economy. This portion of the paper will shade light on the running business in the emerging market, which is highly significant for the corporate entities for the sake of coping up with rapid development of globalization.

Strategic Innovation

In the contemporary scenario, globalization is being considered as the key factor for amplifying the global economic life. Increased production of goods and services, free movement of information and resources and smooth flow of innovative ideas are some of the major outcomes of globalization. At the same time as discussed by Dunford et al., (2016) due to rapid development of globalization, the way of implementing high-end technology has also become extremely efficient. It has paved the way for the nations to contribute a large to the global economy. Globalization is playing a pivotal role for the nations to be involved in trade in different levels, which is the key of strengthening rate of sales. This is serving nations with the ability to produce to produce products in economic sectors with utmost efficiency. Based on the discussion of Intriligator (2017) it can be said that according to the framework of economic convention, consistent trade promotes economic efficiency.

Advancement in the liberalization of global trade, movement of capital, technological progression along with exchange of ideas are some of the major outcomes of globalization. Tian et al., (2018) highlighted that all these functions have a strong influence on decreasing the cost of communication and transportation, which is very much needed in order to run the business in a cost effective manner. Fast progression of openness of the emerging markets like China is playing a major role for the multinational firms to access such market and thereby accelerate their economic condition. Since 1970, globalization and the notion of world trade is gaining significance of importance. Doz (2017) said that international trade can have a firm contribution on shaping the global economy, As a result of ongoing development of international trade, the global national income is also being shaped. The role of multinational firms is needed to be considered in this context. These firms can have a strong contribution in promoting international trade. Globalization is driving the global business environment to implement export-oriented developments strategy, which is very much needed in order to promote economic development.

Shenkar, Luo & Chi (2014) showed the fact that globalization is the key of boosting the economy of East- Asian nations such as China, Singapore along with Republic of Korea. Still, it has also been perceived that, not-so-developed countries are also incorporated within the process of globalization and international trade. As an outcome of globalization, international trade is gaining significant importance in recent scenario. Bartlett (2017) commented that this is acting as an engine of growth as it is serving multinational firms with the ability to compete in the international market and thus accomplish international recognition.

As opined by Giddens (2018), trade in the era of globalization is a lot different from that in the past. Globalization has created a many opportunities to take the benefit from. On the other hand, it has created the challenges, which are yet to be resolved by multinational firms. For example, globalization can help in minimizing the costs through a partnership establishment. It has benefitted companies in the past. It continues to do so with new players taking the advantage from it. On contrary to this, globalization is responsible for a lack of an effective co-ordination between different regional branches. If few of subsidiary branches have operations in countries such as Canada, the United States of America, the United Kingdom, this will require employees who are well versed in different languages. Now, based on the findings of this article, it can be said that firms with better strategic and financial capabilities will outperform those with less competency.

Purpose

Peters (2015) stated that the business of 21^st century will be reshaped by revolutionary technologies, knowhow, cross country flow of goods, investment, ideas, training, and people. Considering the stated facts, this can be said that firms with better capabilities in adopting to emerging technologies, and efficiency in facilitating and handling cross-country flow of goods will have the advantage of the market. In addition, dragon multinationals have been very active with these facts. They have proved their credentials in adapting to new technologies, and moving to the international locations. Mathews (2006) confirms that Lenovo is the most successful manufacturing high-tech firm in China to have globalized by merging with IBM PC business. The acquisition has created two different global brands such as Lenovo and IBM. The merger did help Lenovo to reach to the global platform, and an access to its management expertise.

Economic integration is defined as an effective arrangement in between different regions, which can have a firm impact on removing the strong trade barrier and thereby ensure healthy coordination in between fiscal and monetary policies. Forsgren & Johanson (2014) observed that contemporary scenario is being considered as the era of economic globalization, in which the multinational organizations are playing a major role in strengthening the international economy. These companies had reduced the pool of human resources that are only available in the domestic market. Rather, as stated by Picciotto & Mayne (2016) they prefer to hire expatriates who are more proficient in handling international relation.

As they are operating their business at global scale, the multinational companies are committed toward employing highly skilled human resources, who can satisfy the fundamental objectives of business. Cavusgi et al., (2014) observed that the foreign companies are more likely to offer the employees with high salary package compared to that of the domestic firms. There lies the reason, for which the human resources are more attracted to that of the multinational companies than that of the global companies. Yet, Cravino & Levchenko (2016) showed that in order to retain skillful and efficient staffs in their organization, the multinational companies are also showing their concern towards offering the employees with comprehensive salary package and thereby mitigate the challenge of employee deficit.

As stated by Audretsch, Lehmann & Wright (2014), multinational firms are responsible for transacting modern and emerging technologies to developing nations. In short, this can be said that multinational firms play a notable role in economic development. It does so in numerous ways like by promoting the foreign direct investment, by transferring technology, by creating capital inflows, by promoting exports, and by making investments in infrastructure development. In recent years, there have been a decline in the interest level of the developed countries in regards to becoming a part of developing nations with their larger GDP assistance. Multinational firms can help to bridge the gap between the developed and developing nations by actively making the direct investments. Foreign direct investments can influence the income and employment rate in a country. However, its benefits are not limited to these specific areas but are expanded to some other countries also.

Hutzschenreuter, Kleindienst & Lange (2016) shaded light on the fact that the multinational companies are offering higher salary to the employees with the intention of enabling them to cope up with intense competition in the global market. Empirical evidences are showing that some of the multinational companies follow creative technique such as not paying the taxes, which is one of the most significant factors in terms of surviving in the volatile business environment. This can have a strong impact on international labor migration. Still Beamish & Lupton (2016) counter argued that offering higher salary package to the staffs is in turn increasing the cost of internal operation, which is creating barrier for the domestic companies to secure higher rate of profit margin. In the countries like India and China, the growing trend of multinational companies is in turn affecting the economic condition of local companies.

In the opinion of Giddens (2018), multinational firms transfer latest and emerging technologies to developing nations. New technologies are needed to bring in the changes in the existing system. For example, e-commerce websites have sophisticated the shopping experience for people in Asian countries. On the other hand, it also created ample of projects for IT firms. In addition, these platforms can also be used for doing B2B, and B2C business. Similarly, education is essential for a socio-economic development of a country. There are countries especially in Asia, which are still far behind in implementing emerging technologies at the educational level. These countries are yet to adapt to e-learning, and virtual classroom. Hence, as per this article multinational firms take care of technology transfer in developing countries.  

Coping up with intense competition in the market is another vital aspect of multinational companies. This is the way, through which they are responding to the prompt emergence of globalization. Feenstra (2015) highlighted that they used to run their business in comparatively lower profit margin, which is the key of making enormous amount of profit. Strategic pricing policy is being followed by the multinational companies. Such firms usually sell their products in lower price, which is one of the fundamental factors for increasing rate of sales by catching the attention of wide range of customers. Jones & Kierzkowski (2018) observed that the inclusion of this strategy makes it easy for the multinational companies to amplify their share in the global market.

Global value chain is considered as one of the major aspects of international trade as this can be regarded as a system, in which wide range of people related to production are involved. This is basically a framework that comprises of all the necessary activities that are required for the sake of completing entire process of production (Leamer & Stern, 2017). Comprehensive alignment in between international fragmentation of production and global value chain is a vital factor in the creation of employment and thereby promote sustainable economic growth. Globalization is acting as a driving force behind the multinational companies to devise comprehensive trade and investment policies, which is highly required for strengthening global value chain and thereby become a key player in the international market. It is true that, even the multinational companies used to produce products in one country (Edmond, Midrigan & Xu, 2015). However, globalization is driving them to assemble products in multiple countries. This is the way, they fortify the value of products and make them more lucrative among the customers. With the assistance of global value chain, the companies can trade know-how and thereby make partnership with other companies and create products together. Burstein & Vogel (2017) showed that inclusive global value chain is one of the most significant factors in terms of exporting and importing products.

Thus global value chain is being considered as a strong and powerful driver, which ensures sustainable growth in production rate. Creation of wide range of jobs is being considered as one of the greatest factors of global value chain, which is playing a major role in accelerating the living standard of people. In addition, Gilpin (2018) showed that successful implementation of global value chain is supports the countries like China to import both skill and technology and thereby boost the rate of employment. Through global value chain, the countries also become able to stimulate growth by incorporating value added tasks by embedding high-end technology. Thus, it can be said that, global value chain enables the companies to initiate their development process. Through global value chain, the companies can maintain healthy relationship with all their branches in different countries and so maintain consistency in the business process (Shenkar, Lu & Chi (2014). It is the prime responsibility of technology and capital intensive industries to develop as well as deploy their knowledge, which is the key of attaining ownership structure and this cope up with intense competition in the international market.

It is true that, the multinational organizations, operating in the emerging market are highly exposed towards attaining growth. However Cavusgil et al., (2014) contended on the ground that due to the unpredictability and uncertainty in the international market, multinational enterprises are facing certain challenges in the way of running their business in the international market. Culture, standard and practices of different countries is being considered as a greatest challenge faced by the multinational companies in terms of operating business in the international market. The companies from developed countries certain financial risks while operating in the developing countries due to lower exchange rate.

Costinot & Rodríguez-Clare (2014) observed that uncertainty about the future is one of the challenges that business of all kinds are expected to face. Customer and market trends can significantly impact on the economic climate. If it happens this would become difficult to predict or forecast the market needs, and identify relevant strategies. It is worth noting that the number of CEO who are capable in dealing with such circumstances is only a few.

As stated by Megginson (2017), performance monitoring is a complex task, which is not appropriately handled by many firms. To monitor the performance, Unique KPIs are set. For example, KPIs for a sales team can be such as attaining a target percentage of market shares within the next two to three years of product or service launch. Additionally, total sales in one calendar year will communicate whether the change has made any difference to the performance.

According to O’Neill et al. (2017), multinational firms in the 21^st century will also be tested for management leadership. Managers can have a strong influence in the business performance. Managers of these days are not just confined to understanding and dealing with one business area but are expanded to multi areas. Now, managers need to have at least an idea of different business areas. However, it is still preferable that managers are multi-skilled as they will be able to efficiently handle the different circumstances. An understanding of different business areas is required to understand its different interrelated issues, identify ways to head with such issues, and design appropriate remedial strategies for issues. Despite knowing that a leadership quality in managers is a growing concern, many companies still do not have such leaders. Leaders capable in dealing with critical circumstances are only a few. They struggle to make decisions at different situations such as making an appropriate marketing forecast, understanding consumer behavior, and doing the financial analysis. An inappropriate market forecast can lead to issues like out of stock, and over stocking. In case of an out of sock, competitors will gain the advantage. In case of over stocking, operational costs will unnecessarily increase. Both circumstances can affect the inventory management. An inaccurate inventory management is essential to avoid a mismatch between auto generated bills, and manual entries. Similarly, consumer behavior is essential to offer the most relevant products. This is another place where managers fail to deliver. With regard to consumer behavior, this can be said that new players of globalization are doing better than even many old players. Li & Fung provides such an example of a firm. It is a contract basis manufacturing service provider based in Hong Kong, China. The major reason behind its success and the global existence is its strategy to construct a vast network of suppliers in and across several continents. The company accelerated its internationalization with the help of the purchase of the existing players (Mathews, 2006).

Lack of appropriate marketing segmentation in accordance with the choice of customers from respective countries, their lower purchasing power and lack of apt marketing strategy are also some of the major challenges, faced by the multinational enterprises in promoting international trade. Hutzschenreuter, Kleindienst & Lange (2016) stated that maintaining balance in between price and quality of product is another major issue, faced by the global firms in the way of running business in international market. They often face problems in understanding the institutional influence such as judicial system, educational system along with political system, which obstruct them to cope up with local culture.

The inclusion of inefficient industrial infrastructure, lack of IP, expensive and improper bureaucracy along with complicated rules and regulations are also vital challenges, being encountered by the multinational forms. Unreliable and low quality of suppliers can also be considered as the major problems, faced by the multinational organizations (Leamer & Stern, 2017). Multiple regulatory systems of different countries can also make it a biggest problem for the global corporate entities to operate in a certain framework, which is utterly a threat towards maintaining consistency in the business process. Transactional challenges, risk from operational income and fluctuation of exchange rate are also some of the key challenges, which the multinational organizations can face in the way of running business in the global market.

Megginson (2017) opined that emerging technologies have created pressure on both new and old players in the 21^st century. It has now become a necessity to innovate or left behind. This is where new players have been doing well as compared to old biggies. For example, Acer has grown to become one of the most highly successful PCs, PC components, and IT companies in the world (Mathews, 2006). The company, which began its internationalization in the later part of 1980s had nearly bankrupted it. The process included large acquisitions. However, it did not lose the passion to become a successful company. Eventually, it came back again by regrouping and following an incremental expansion strategy. It did collaborate to local firms and emerged as a company to have expanded through the world’s periphery. The company has to its credits to have developed a “fast-food” business model, an innovative organizational firm, and a cellular organizational structure.

In order to overcome these challenges, it is imperative for the multinational companies to devise significant international business strategy. Edmond, Midrigan & Xu (2015) suggested that this is the way, through which they can be able to cope up with intense challenge and thereby gain international recognition. Vertical integration is one of the greatest strategy, which the multinational organizations must implement. This is way of aligning the suppliers and distributors, which is the key of manufacturing appropriate products as per the requirements of customers. Product diversification is also a greatest strategy, which the global firms can execute in order to attract wide range of customers. As the multinational enterprises operate business in different countries, they have to retain customers from different background. There lies the significance of product differentiation, which can help the firms to offer the customers with variety of products and thereby generate satisfaction among them (Jones & Kierzkowski, 2018).

As the business environment is extremely complicated, there are certain risk, which can be faced by multinational companies. Thus, it is imperative for the higher authority of global firms to implement risk management strategy and take necessary step for aligning it with organizational infrastructure. They should take action in terms investing in local market.) The rate of risk from such policy is comparatively low. Cravino & Levchenko (2016) commented that offering high quality of products in a convenient price is another major risk management strategy, through which financial risk can be mitigated.  

International business strategy is basically a planning, through which the challenges of running business in the global market can be mitigated. Analyzing the condition of target market is the key step of accessing the same. This strategy can serve the multinational firms with the ability to assess the fundamental requirements of the staffs. Tian et al., (2018) said that assessing the target market can also help getting in-depth knowledge of the competitors, which is very much needed in terms of implementing effective business strategy and thereby accomplish competitive advantage. This can pave the way for firms to strengthen their position in the market.  

Business generic strategies mainly keep the closer concentration on the benchmark that can help in achieving the higher profitability parameter. The post globalized era has introduced such effective strategies by presenting the advancements in the technological parameter. It is thus quite necessary for the business organisations to select the appropriate generic strategies that are suitable to compete in a competitive landscape. One of those effective strategies was introduced by Michael Porter that is known as Porter’s Generic Strategy (Tansey, Spillane & Meng, 2014).  The traditional methods used by the old market player is now improvised by the effects of globalization. This strategy mainly focuses on three major components that are essential for maintaining the competition level in the emerging market. The cost leadership strategy is mainly focusing on gaining competitive advantage in spite of the lower production cost of any specific product or service. The emerging companies mainly look for the method of cutting down the costs from the value chain that includes marketing, wastages, or production. The product is then priced by maintaining the competitive parity. Another component is ‘differentiation strategy’, which creates the value for the product or service and differentiate it from other competitors. The new players in the emerging markets need to develop the strong marketing, segmentation, and branding skills to win over their existing competitors. Another component of this strategy is ‘focus’ strategy, which involves the closer concentration on the defined and narrow market segments. This segment is mainly known as ‘niche market, which helps the business marketers to gain the competitive advantage. The indulgence of these specific strategies create the difference in selling the products or service and gaining the competitive advantage.

Globalization can have a firm impact on influencing both the consumers and producers to access comparatively cheaper lower market and thereby accomplish economics of scale. One of the greatest aspects of globalization is that, it supports in ensuring competitiveness in market, in which the rate of monopoly profit can be reduced. Bartlett (2017) observed that through this way, the companies can attain higher growth, which results in higher per capita income. As the multinational firms of operate business in multiple countries, higher per capita income can help the developing countries to achieve prompt economic growth by accelerating the rate of employment. With the assistance of globalization, free movement of ideas, technologies, skills and all the relevant resources can be ensured, which is mode of amplifying the underlying value of business. However Forsgren & Johanson (2014) argued by saying that globalization is resulting in highest inequality in between income and wealth, which is the fundamental reason behind increased political and social tension.

Moreover, due to globalization, the price of commodity is also increasing in a rapid manner. Moreover, it has also been observed that globalization is responsible for land degradation and damaged ecosystem, which is utterly a threat towards protecting biodiversity. This is also resulting in trade imbalance. There are certain countries like UK, who are accessing bigger trade surpluses compared to smaller countries. Such trade imbalance can have a firm contribution in creating financial tension between different countries. Additionally, there are wide ranges of countries, who are becoming the victim of export dumping, which is utterly a threat towards maintaining financial stability. It is true that, increased job creation is one of the greatest aspects of international business, still it is restricting local employment, which is resulting in increasing rate of unemployment in the local market. Still, Picciotto & Mayne (2016) showed that globalization is playing a crucial role in opening new capital market, which is making it easy for the developing countries to have financial stability.    

It has been observed the new globalized business market has gone through the considerable transformation, which has crated impacts on the educational, social, economic, and political landscape. However, most of the changes are identified in the use of the technological tools. It is quite noticeable that the new players in the emerging market are becoming more inclined towards the information technologies. Simultaneously, the information and communication industry has been exemplifying the revolutionary improvements. The millennial are quite inclined towards innovations that are driving the business to gain the competitive advantage.

On the other hand, the economic growth and development has been suggesting a complex structural realignment of the different investment related streams. In such cases, the continuous clustering of the business enterprises has been persuading the businesses to adopt the niche marketing approach. The role of innovation is much commendable in such cases. The development of the human resource management is another important segment in such context. The new players in the market need to strategize their work activities according to the feasibleness and demands of the competitive business scenario. The revolution in the telecommunication industry has been creating the significant impact on the international trade. Hence, it can be stated that the globalization effects in the current business market has been driving the current business market into an advance level. The old market players are thus coping with the current scenario to sustain their competitive position (Jogerst et al., 2015).

In this section, a few frameworks will be recommended as solutions to all discussed issues in this report so far. It does not mean that these recommended frameworks will help multinational companies in getting rid over issues but will provide solidity in operations and will raise the competency level of its bearer. In this section, old frameworks in practice will also be discussed just to establish a fact that business, economic, and political shifts are reshaping the term globalization.

Following are the recommended frameworks (Jogerst et al., 2015):

In earlier times, global growth was mainly driven by only a few countries. These countries had also served as economic pole then. By an economic pole, it also means a domination being done only from what is today called the developed nations. Developed nations primarily include the United Kingdom, and the United States. In the old economic model, high growth rates were witnessed across different emerging markets. Additionally, strong merchandise trade at that time had multiplied the effect of propelling GDP growth.

With regard to the recommended economic model, there will be a multipolar and fragmented global growth. It means that emerging countries will be benefitted form an increased spending in emerging technologies. It also means that these countries will experience a fragmented global growth. The emerging markets will follow a divergent path to get an advantage of market opportunities. Divergence can be viewed across different operations practices like marketing, and making of financial strategies. However, this recommended model will slow down the merchandise trade, which at once was a part of globalization. An increasingly growing trades in services will act as a growth driver.

Earlier in past, physically integrated supply chains were established, and managed by low-cost, and large manufacturing networks. It means that supply chains in earlier times had no existence of the fourth industrial revolution (Industry 4.0). It also indicates that supply chains were spread across large networks; however, these were comprised of low-cost manufacturing networks. The production facility was managed with low-cost strategy; however, lacked to offer an efficient production capability as compared to production capabilities at present.    

In the context of the suggested global business model, physical networks will be decentralized leading to protectionism. This will give path to Industry 4.0, which will comprise of an application of Customer Relationship Management (CRM), Internet of Technology (IoT), and Cloud Computing in the supply chain networks. On a broader aspect, the framework will enable a digital integration of device, consumers, and companies. Devices will be connected over an IoT platform to allow a marketing forecast in real-time. CRM will be more in use to collect, and access to a large-chunk of data in real-time. However, this will require using a feasible data analytic to ensure a timely, and justified access to the desired data.

In the era of old globalization, a few selected countries had converged on economic issues. The definition of which can be obtained from what institutions like G7 and Bretton Woods have given regarding the convergence. This was the result of several trade act being signed between one or more countries. Few of such examples include like OECD, and NAFTA. At that time, preference was given to global economy over politics.

As per the suggested global political model, there will be a less or limited convergence on the agendas like the world’s biggest economies. In addition, there will be a rise in state capitalism. Potentially, there will be a coordination between non-economic areas like privacy, cyber security, and tax havens. It means countries with advanced technological solutions to fight against the above-mentioned issues will have an economic advantage.  

Conclusion

To conclude, the globalization of 21^st century will offer both opportunities, and challenges to global businesses. Both old, and new players will have to act strategically towards business issues. Business issues will definitely prevail over business, political, and economic model. However, new players as being found in this study have an advantage over the olds because these MNEs have shown higher resilience to innovation. Since, new players follow an incremental expansion strategy, and conduct more innovation than the olds, these MNEs should witness a further growth in their businesses. The globalization of the 21^st century will witness a fragmented global growth, and also a slowdown in merchandise trade. Physical supply chain networks will be replaced by Industry 4.0 network. Digital integration between companies, devices, and consumers will occur. It means a large data could then be taken care within a less span of time and with increased efficiency. Hence, companies will be able to offer more relevant products and services. This will also increase the market competition as companies with better data analytic capability will have the advantage. Moreover, there will be less convergence on the agendas such as world’s biggest economies. Divergence will be observed across various business domains like marketing, finance, human capital, and human resource management. Businesses will be mostly run and owned by different states. There will be coordination in the form of talks on discussing issues like privacy, cyber security, and tax havens.

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