Multinational Enterprises (Mnes) Exploiting Opportunities in Emerging

Multinational Enterprises (MNEs)

Exploiting Opportunities in Emerging Markets: The Problems and Successes of MNEs

To begin with, legal and economic hurdles are some of the most significant problems MNEs seeking to further enhance their global presence encounter. Each and every country conducts its political, legal, and economic undertakings in a unique way. For this reason, MNEs seeking to exploit opportunities in emerging markets have to contend with various taxation, institutional, as well as legal challenges that effectively make their forays into the said markets even more complicated. MNEs also encounter problems in regard to language differences. This is more so the case given the relevance of effective communication in business transactions. Cultural differences could also make internationalization much more challenging. Some of the largest multinational corporations with operations across the globe include but they are not limited to Gillette, Pampers, and Coca-Cola. These three companies according to Gitman and McDaniel (2008) rake in more revenues from their global operations than they do from their home markets. In addition to saving significant sums of money in labor costs, multinational corporations according to Gitman and McDaniel (2008) can also be able to further enhance their operations by taping new technology from across the world.

Characteristics of MNEs from Developing Nations and their Forays into New Markets

In the past, the rapid development as well as growth of a number of economies has seen multinationals from developed countries set up base in the said markets. MNEs from developing countries have also been enhancing their activities and thus presence in global markets. One of the key characteristics of MNEs from developing nations is their favorable cash flows. According to The Economist (2008), it is the rapid growth of their home markets that gives multinational corporations "spare cash to invest abroad." With well-established operations in their home countries, MNEs from developing countries can be able to establish and sustain operations in markets they regard profitable. Secondly, MNEs from developing nations also tend to be much more resilient and flexible. This particular characteristic of MNEs from developing nations is often a direct consequence of the difficult and challenging business environments they operate under in their home markets. Indeed, in the opinion of The Economist (2008), "the difficulties of operating in an emerging market may make managers adaptable and resilient." This is a pointer to a superior management-orientation. The motive of MNEs from developing countries is yet another unique characteristic that sets them apart from their counterparts from developed countries. According to Sim and Pandian (2003), most MNEs explore other markets as a way of further expanding their markets and decreasing their cost of labor. International forays of Western MNEs on the other hand according to Sim and Pandian (2003, p.36) "are based on efficiency seeking motives of optimizing their intangible assets and advantages."