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1: Are Emerging Markets an Opportunity or a Threat?
The most obvious debate on this topic would be the potential benefits and problems involved with targeting emerging markets:
Strong Economic Growth
Rising consumer incomes and growing `middleclasses'
Opportunities for joint ventures with local businesses
Culture/varying customer needs
Difficult to protect ideas from competition due to inadequate laws
Infrastructure could be poor, making distribution and marketing difficult
Students can build strong evaluative arguments, using examples of successes and failures in emerging markets and then considering the
factors that success might depend upon. A good compare and contrast here would be Coca Cola (who recently announced their largest
areas of sales growth to be India (+20%), China (+9%) and (+4%) from Brazil) against businesses like Kellogg's who failed to attract
enough sales in India due to cultural and lifestyle differences.
2: What makes emerging markets attractive? Push and Pull factors
Another interesting evaluation point could be to consider the motives behind a strategy of targeting emerging markets. These can be
grouped under headings of `push' and `pull' factors:
Reasons for wanting to grow outside of domestic country:
· Restrictive and costly legislation
· Weak UK/US/EU economies
· High levels of competitive rivalry
· High wage costs and operating costs in UK/US/EU
Factors that make emerging markets attractive:
· Strong economic growth
· Large and growing populations
· Growing middle classes
· Less competitive pressure
· Cheaper wages and operating costs
Students here can evaluate the relative influence on businesses of the `push' and `pull' factors, and which of the factors are likely to be
the most significant behind a strategy of targeting emerging markets. Nestle for example have recently announced that their sales in their
main US and European markets have grown just 3.1% versus 13% growth in emerging markets.
3. Will the BRIC `Bubble' Burst?
Students might also consider a number of recent reports suggesting that growth is slowing in emerging markets, which might mean the
BRIC `goldmine' could have limited appeal in the future. It was announced this month that China's GDP had grown at a rate of 8.1% for the
first quarter of 2012, which is the slowest pace of growth for almost three years. The Indian economy only grew by 6.9% in the financial
year to 31 March 2012, also the slowest pace in three years. Students could here question if businesses are likely to be investing as much
in these markets with such economic uncertainty, backed up by a recent news release on Tesco's website:
"With the slowing economy in China, a combination of persistently high inflation and wage cost pressures are making the environment for
mainstream retailers much more challenging. This background has led us to take a more cautious stance on the market, at least for the
time being. We had already taken a more measured approach to substantial new capital commitments to freehold shopping centres and
we have also decided to hold back on the pace of new hypermarket development this year with plans to open 16 stores, instead of
stepping up the pace of expansion as we had intended"
Emerging markets is a very topical area of the BUSS4 specification, and considering evaluation from a number of angles with a number of
compare and contrast examples, should be useful for preparation for essays on this subject.
10 Tips to Think of When Writing a BUSS4 Essay Answer
1. Avoid business cliché (e.g. `It's not all doom & gloom', `blue sky thinking by senior management' etc.)
2. Avoid shopping lists of points in your paragraphs try and develop one point of argument through an entire paragraph (use connective
stepping stones as an approach)
3. Don't assume the examiner knows your examples set the scene with a brief one line summary of the industry or market the company
4. Don't rely on just what your discuss in class with your Teacher think about how could you dig a little deeper on your examples who
know's, that company may be a suitable example for not one but five or six topics covered on the module.
5. Avoid 2/3 line final paragraphs your final paragraph is evaluative in nature, not simply a conclusion. There is 14 marks awarded for
evaluation on a BUSS4 essay and most of these will be accessed in that final paragraph.
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Make sure you read the question more than once the question might be about `technological change', not `technology'. That should
make you think about the type of examples you bring into your essay.
7. Don't dive into your arguments a 4/5 line introduction paragraph at the start of the essay helps set the scene and adds structure to
your answer. Remember this is an essay so a logical structure and framework needs to be in place.
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