Introduction
The term of emerging market economy(EME) was coined by Antonie W. Van Agtmael from the international finance corporation of the World Bank in 1981. It refers to country with an underdeveloped industrial base and infrastructure but with a rapid growth rate even more than the developed countries. In addition, emerging market is often unstable in politics and institution, as well as continued demographic growth in some extent. (Tarun Khanna, 2010)
Lenovo is a Chinese multinational technology company with headquarters in Beijing, China. It is the world’s largest PC vendor and one of the world’s leading smart phone companies listing on the Fortune 500 list that having major research and manufacturing centers over the world.
Analysis of Emerging Market where the company is based
Emerging markets is a relative concept of countries in Western Europe, North America, as well as Japan, Australia, New Zealand and other such "mature market." Emerging market countries are those who have the potential to become a mature market countries, and part of the conditions, with the commercial market mechanisms that is industrial based and to a certain extent of specification. According to the authoritative definition of the international finance corporation, whenever the Gross National Product (GNP) of the country has not reached the level of high- income countries delineated by the World Bank, the stock market in this country is an emerging market. The four largest emerging
During the changing of world economy, it is increasingly common to hear the term ‘emerging markets’ and from news and report. In the mid-1980s, the term ‘emerging markets’ was created by the World Bank, and has significant influence on the global business world nowadays (Gwynne, Klak and Shaw 2003). To raise investor’s attention to those developing countries, there are numerous characteristics springing up which are given by researches and economists. However, some of those characteristics are contradictory and it is difficult to give a real definition. This essay discusses the main characteristics of ‘emerging markets’ as defined by the World Bank and economists.
The differences between industrialized, transitioning, and emerging countries are great, especially from a taxing and economic standpoint. “The terms industrialized or developed countries generally refer to the member
During my stay in America, I was pleasantly surprised to witness the changes that had occurred in the last two centuries. Ironically, the mercantile power that was Great Britain is now economically on par with its former colony of America. As I presumed, free market economies are far stronger than their former mercantilist counterparts as they are the standard in modern democratic societies. It seems that global economies now realize that the market is not a zero-sum game, mutually beneficial deals can be reached that facilitate free trade which stimulates market activity.
Developing countries tend to be located in the global south wile developed countries are located in the global north. In the 1980s neoliberalism took full swing and focused on an open economic market, and the creation of institutions. It created the Bretton Woods institutions in order to spread American values and promote economic growth through privatization of state owned enterprises. “The last 25 years has seen the most rapid, and most broad-based, growth in developing countries, ever” (Dervis, Kharas). Globalization has facilitated the spread of neoliberal ideology across the globe through an economic international trading system. For example, the North American Free Trade Agreement (NAFTA) with regional partners, such as Mexico, promoted an open approach to the economy and provided important benefits for both countries. Another example, was the creation of the World Trade Organization (WTO) that includes over a hundred countries.
Today’s Global economy is governed by a delicate balance of variables. The addition of a new economy to the global market affects all of the pre-existing variables, bringing with it a host challenges and opportunities. Much like an initial public offering, countries may “buy -in” or develop economic agreements with the emerging market economy (EME). This often results in the country “buying-in” to the emerging economy, getting services or products at a discounted rate, while the emerging economy gets business like China and the United States. These types of agreement may result in the poorer country sacrificing its citizens’ well being, to ramp up for economic growth, like China. In the end most countries economies are interconnected for example with the United States-Canada relationship. If one country’s economy were to collapse there would be strongly adverse effects on the
Brazil’s agricultural advantage stems from its extensive natural resources. The country’s competitors either utilize more supplies or more time in order to yield an amount that can rival Brazil’s production. Although every other country desires the agricultural production capable of Brazil, Brazil‘s government is determined to invest in industrialization in order to modernize its economy. While Brazil has a large amount of natural resources available for use, its government must provide the funding of the growing industrialization, to include: energy, materials, and increased employee earnings.
Due to the markets in developed country is fairly saturated, the multinational companies(MNCs)have started to turn their attention to the emerging markets. Investing today for the future growth is the key. As stated by Reem Heakal, an EME provides an outlet for MNCs to expand by serving as a new factory, or a new subsidiary, or a new R&D or service center, or new sources of income. However, as the EMEs are in transition, so relatively unstable. It will appear in regulation change, government’s intervention, change in government, non-stable floatation in the country’s exchange rate, or even the collapse of the capital market. These political and economic risks definitely cause serious problem or crisis for MNCs, which might turn the investments from positive revenue to be negative. But the bigger the risk, the bigger the potential return, therefore, the emerging markets have become the
According to latest MSCI Emerging Market Index, there are 24 emerging market in the world, including China, India, Brazil, Russia and South Africa – also called the BRICS countries. According to the World Bank, in 2013, the total GDP of BRICS countries was $15.8 trillion, putting the BRICS in the third place after EU ($17.3 trillion) and US ($16.8 trillion). Therefore, without going into the detail GDP of other developed and emerging economies, it can be inferred that the importance of emerging countries in the global economy has been increasing over time. In view of the increased significance of these economies, the current study is expected to provide some additional light in the area of the legitimacy of multinational companies in emerging economies.
The attractive attributes that emerging markets offer contributing to the strong future growth of investments include growing consumption, low debt levels, and room for productivity gains. First, growing consumption means that emerging economies are focusing more on domestic consumption-led growth rather than importing goods from developed countries. Additionally, emerging economies are also offering relatively low debt levels because their balance sheet are usually safe due to their spending limitations and high saving rates. Last, according to analysts, emerging markets are investing in better infrastructure and technological advances, which could greatly boost sustainable economic growth in those countries. These three attributes are potential factors to be accounted when making an investment (Brisk, T. 2011).
In this study, countries with GDPs per capita ranging from $75 billion and higher are considered advantaged. As these countries were included in the top 100 ranking of economies worldwide and have rapid economy growth. Countries with GDPs per
Brazil is currently the world 's seventh largest economy and is labeled an emerging economy under the BRIC classification. Over the past years they had large opportunities for growth but lack of investment in public education and income inequality has caused the country to have slower growth than its closest economic peer, China. Income inequality and education inequality affects the Black or mixed-raced Brasilians the most. These two issues then translate to other problems effecting the economy such as increased violence and a major prison population compared to its Latin American peers.The evaluation criteria for research on the education system will be effectiveness, cost, feasibility, and justice. The policy proposal will need to be more effective, raise the GDP higher than the status quo, and have more underrepresented students graduate from universities. Feasibility will be emphasized in the new proposal. There are many who argue the new education system is giving an unfair advantage for Afro-Brazilians, the proposed policy proposal will highlight the beneficiaries as the country benefiting as a whole.
In 2013, emerging markets accounted for more than half of the world GFP based on purchasing power, per the International Monetary Fund (IMF). In 1990 they accounted for less than a third of a much smaller total. From 2003 to 2011 the share of world output provided by the emerging economies grew at more than a percentage point a year. The remarkably rapid growth the world has seen in these two decades marks the biggest economic transformation in modern history. It’s like will probably never be seen again.” (economist) “The most impressive growth was in four of the biggest emerging economies: Brazil, Russia, India and China, which Jim O’Neill of Goldman Sachs, an investment bank, acronymed into the BRICs in 2001. These economies have grown in different ways and for different reasons. But their size marked them out as special—on purchasing-power terms they were the only $1 trillion economies outside the OECD, a rich world club—and so did their growth
Hong Kong Lenovo Company was established by Liu Chuanzhi and Hong Kong Computer Systems Limited and China Technology Transfer Ltd, 30 million Hongkong dollar investments by each in Hong Kong. In 1989, the original company changed its name to "Lenovo Group Limited", which appeared in Beijing Lenovo and Hong Kong Lenovo. At that moment, Lenovo already has two research centers in Hong Kong and Beijing, three production bases in Dongbeiwang Beijing, Shenzhen Bagualing, Chai Wan Hong Kong.
Lenovo joins two spearheading innovation organizations Lenovo and IBM. Lenovo Inc. is a main worldwide producer of Personal PCs and Mobile telephones. Lenovo is a spinoff of the Legend Group, Which was set up in 1984 by a gathering of eleven PC researchers drove by Liu Chuanzhi.