What makes emerging markets attractive for international business? Discuss emerging markets as target markets, as platforms for manufacturing, and as a sourcing destinatio
ii)Given growth rates and other characteristics for emerging markets, what markets should Tata Motors target for sales of small cars like Nano? What country-level factor should the firm consider as it evaluates the potential of various emerging markets?
tions from Egyh models "countries where people live on less than $2 per day. Transsion is a Chinese manufacturer of I artphones that has become the largest smartphone company by sales in Africa. The firm has sold more than 200 million million phones on the continent, by leveraging emerging market advantages such as low-cost labor and business savvy for operating in challenging environments. Gradually, MNEs are finding various market opportunities. By using innovative business models adapted to local conditions, they play a key role in addressing the continent's medical needs and generate profits. For example, establishing chains of low-cost clinics is helping ad- dress Africa's health care needs. 47 The application of business models such as local entrepreneurship, microfinance, targeted marketing, and MNE direct investing holds enormous potential for addressing poverty in Africa." However, critics charge that MNEs do much harm in Africa, such as exploiting local resources, operating sweatshops, and generating pollution. Where do you stand? Can MNEs successfully address poverty and other problems in Africa, or do such firms do more harm than good! CLOSING CASE Tata Group: India's Top Global Challenger Tata, one of India's largest companies, operates in more than a Background on the Tata Group dozen different industries, including automobiles, chemicals, infor- Founded in 1868 in Bombay as a textile trading company, Tata mation technology, consumer products, engineering, and consulting. gradually expanded into hotels, power plants, chemicals, steel pro- Altogether, Tata comprises more than 90 firms. The chairman of Tata duction, and several other industries. The government of India long Group until his retirement in 2017 was Ratan Tata, the charismatic de- discouraged international trade by imposing high trade barriers scendant of the company founder. Now in his eighties, he emerged and bureaucracy. As these restrictions loosened in the 1990s, Ta- as a popular and respected corporate titan, known around the world. ta's international operations flourished. Tata Motors began produc- As the group's chief visionary and dealmaker, Mr. Tata aggres- ing cars in joint ventures with Fiat and Daimler-Benz. Tata bought sively expanded the Tata Group into world markets. One of the 30 percent of the coal subsidiaries of an Indonesian mining com- group subsidiaries, Tata Steel, purchased the Dutch-British steel pany to supply coal for Tata's power plant in India. Altogether, the giant Corus Group, for $13 billion to establish a strong position in Tata Group has factories in numerous emerging markets, including the global metal industry. The move boosted Tata's steel-making Kenya, South Korea, Malaysia, Russia, and Thailand. capacity fivefold. Tata Consultancy Services acquired France's As one of India's largest firms, Tata has many competitive Alta SA, aiming to become a major player in Europe's information advantages, including vast financial resources and access to echnology services market. Another group subsidiary, Tata Mo- capital on favorable terms; strong corporate image; connec- tors, acquired Jaguar and Land Rover from Ford for $2.3 billion. tions with countless high-quality business partners; competitive Tata Motors launched the Nano, positioned as the world's cheap- cost structure, thanks to the huge, low-cost Indian labor pool; st car. The Nano addressed a longtime dream of Ratan Tata to and long-standing relationships with national and state govern- develop reliable but super-cheap automobiles and revolutionize ments in India. In the auto industry, Tata Motors' reputation is the global auto industry. growing. It counts on sister subsidiary Tata Steel to provide steel
