Investment Commitment Necessary to Succeed in Emerging Markets Essay.

Investment Commitment Necessary to Succeed in Emerging Markets Essay.

Every dream of an investor, whether in individual franchise or Multi-National Corporations (MNCs) is to be successful. Establishing a footing in a new business environment is the greatest challenges that investors grapple with before making decisions. It is even more challenging for an international business to curve a niche in an emerging market. The international business has to take precautions of all the possible risks in the emerging market before fully investing in the same alien business environment (Gregoriou, 2010). Investment Commitment Necessary to Succeed in Emerging Markets Essay.This particular research will be an exploration into how an established North America business organization may enter an emerging market with the sole aim of pursuing growth. The growth will be viewed through the prism of financial and human investment. In order to achieve this maiden goal, the seven rules of international distribution will the precursor.

Rule One: Select the Distributors, don’t let them select you
At the very preliminary stages, the business organization that aspires to plunge head-long into a foreign market targets a distributor from that specific foreign ground. In this respect, the international business organization tries to select a distributor that becomes its cursor into that new market. The distributor to be selected must have dealt with the products and or services that the MNC deals with. To locate a specific distributor, the MNC meets them in trade-fairs or in their physical offices. The distributors act as link between the MNCs and the customers who may ultimately be the consumers of the services or the goods provided by the MNC (Preston & Windsor, 1992).

Rule Two: Distributors that are capable of Developing Markets
The distributors must have the capacity to curve out markets on their own. This is dependent on the fact that the distributors have been on the same market for quite some time. The distributor must be able to have identified the challenges of specific market and instant-coffee solutions for ease of adaptation.Investment Commitment Necessary to Succeed in Emerging Markets Essay.


Rule Three: Local Markets to be Treated as Long-term Partners and not Short-Term
Any prospective MNC must signal to the distributor that their partnership is purely long-term rather than short term. This aids in clientele acquisition and retention. Once the distributor is notified, either in writing or action, that their duty is to exercise the marketing arm in their countries, and then the incentives are already set. The distributors work exemplary perfect on the understanding that their relationship with MNCs is long-term based (Preston & Windsor, 1992).

Rule Four: Market entry is marked by Committing money, managers and approved details
Financial capacity as a first perception of an MNC in a foreign market in itself serves as a marketing tool. MNCs have earlier adopted a method of sending its personnel in the foreign market to assess the viability. The report by the sent delegates offers as a platform of whether to invest in the foreign market. It would work better, and efficiently if an MNC buys some stake in the distributors based (Preston & Windsor, 1992).

Rule Five: Maintaining Control over Marketing Strategy
It may be argued that the elected distributors ought to work independently for efficiency. However, a specific MNC’s strategy must be the umbrella planning model for the distributors. The distributors must adapt to the strategy of the MNC in their day to day operations. The MNC must send its personnel to work either partly or on a full-time basis with the distributors. This enhances growth (Samadian, 2005).

Rule Six: Distributors must provide Detailed Market and Financial Data
Information on the viability of the market is pivotal. An MNC must horn its modes of obtaining this information even before investing. Its personnel should partly play this role alongside the distributors.

Rule Seven: National Distributors’ Linkage in the Earliest Opportune Time
For this fundamental purpose, the MNC in charge creates a centralized regional office or council so that there is cross-pollination of distribution ideas. This exchange of ideas ultimately leads to unprecedented growth in the MNC business. In conclusion, any MNC aspiring to record growth in the foreign market ought to stick to the prerequisites of the above seven rules of international distribution (Gregoriou, 2010).Investment Commitment Necessary to Succeed in Emerging Markets Essay.

  • Gregoriou, G. N. (2010). Emerging markets: performance, analysis and innovation. Boca Raton: CRC Press.
  • Preston, L. E., & Windsor, D. (1992). The rules of the game in the global economy: policy regimes for international business. Boston: Kluwer Academic Publishers.
  • Samadian, S. (2005). Capital flows and foreign direct investments in emerging markets. Basingstoke [England: Palgrave Macmillan. Investment Commitment Necessary to Succeed in Emerging Markets Essay.

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