Understanding Emerging Markets

CAVUMC09_254-283hr 10/15/07 4:57 PM Page 281
Chapter Essentials 281
Apply Your Understanding AACSB: Communication, Reflective Thinking
1. Auto Ornaments Ltd., is a firm that makes accessories
for cars, such as seat covers and window tinting. The
firm has never conducted any international business.
The general manager, Steve Diesel, would like to
expand into foreign markets. He heard that roughly
three quarters of the world’s people live in developing
economies and emerging markets. He figures
there must be a big market in those countries for
Auto Ornaments products. What should Steve know
about the characteristics of developing economies
and emerging markets that make them attractive targets,
and unattractive targets, for Auto Ornaments.
Make a recommendation to Steve on the advantages
and disadvantages of entering these markets. Be
sure to justify your answer.
2. Suppose you work at Microsoft in their Xbox video
game console division. Microsoft has long targeted
Xbox to the advanced economies, especially in North
America and Europe. Management would like to sell
more Xbox 360’s to emerging markets. What are the
main characteristics of emerging markets that might
make them potentially good markets for Xbox? Identify
the major risks and challenges that Microsoft might
encounter in selling the Xbox 360 to emerging markets.
3. CBKing has been trying to export its products to various
emerging markets and has enjoyed little success
so far. You know a lot about emerging markets and
have been anxious to share your views with CBKing’s
president, Mr. Roger Wilko. What strategies would
you recommend Roger pursue in doing business with
emerging markets? You conclude there should be
some demand in the military and the government
agencies. Explain how your firm should go about
selling to emerging market customers.