Candidate Number: Year: Course Code: Degree Title: Question No. & Title: Words count: 3 MN3205 Management with International Business 2496 words Individual Report
Introduction Emerging economies are the current markets to consider as they will have the bigger potential during the next few years. This kind of countries will be able to expand more quickly compared to more developed economies and these markets will take into account an increasing percentage of global consumption. These markets are characterised thanks to some characteristics. Low incomes are the first criteria, which are helping to generate the rapid development that emerging countries are currently facing compared to industrialised economy. Thesemarketsarealsomoreinclinedtovolatilecurrencyfluctuations,mostlyduetotheirlack ofinfluenceandpower.Then,thesecountriesneedmostlyForeignDirectInvestmenttoenable their development. Finally, if the investment is successful it can generate higher-than-average return for investors, because these countries' economies are mostly focus on an export-driven strategy (Amadeo, 2019). Additionally, several external and internal events are able to influencethebusinessperformances,suchasenvironmentalissueswhichcouldaffectthemain production (Citywire, 2017). Founded in 1994 in Seattle, Washington, Amazon Inc. was first established as an online bookstore. Nowadays, the company managed to become the biggest Internet company regarding the revenue by diversifying vastly its production. Actually, in 2017, the company bought Whole Food Market for $13.7 billion, which also considerably expanded its occupancy as a brick-and-mortar retailer (La Monica and Isidore, 2017). In addition, the company is the largest e-commerce market place operating in 14 markets worldwide, which all have their own websites (Grothaus, 2018). The next step that the multinational company might consider would be to expand its production to new economies to increase its market shares. Emerging countries, such as Malaysia and South Africa could be interesting for the company as both economies provide attractive plans to invest, raw resources as well as a high population at a low labour cost. In addition, bigger MNEs, such as Amazon, which have important incomes and well-established infrastructures will have the best place to capitalize (Tanchua and Shand, 2016). This report will evaluate the attractiveness of two emerging markets, which are Malaysia and South Africa. First the attractiveness of each country will be highlighted as well as the attractiveness of the company within both economies. Finally, some recommendations and the entry modes will be put in evidence.
Overall attractiveness Malaysia vs. South Africa The two dif ferent markets recommended for the company would be Malaysia and South Africa. Both emerging economies have several advantages for investors, such as cheaper resources than developed economies. Both governments also set up reforms in order to attract Foreign Direct Investment to contribute to the country's growth. First, Malaysia would be an interesting market to operate for Amazon as it has the most developed overall inclusive development index rankings, which is 3.3, which is the highest within the Asian Pacif ic countries. Additionally, Malaysia has the higher GDP per capita following Singapore, which means consumers have a higher purchasing power compared to other countries within the same region (Brent, 2018). In addition, in order to attract investors to contribute to the growth of the country, the registration process with the