Emerging Market Harvard Case Solution & Analysis

Analysis of Emerging Market Opportunities and Challenges for Companies by 2025:

Developing countries that are growing faster than the developed countries economy pass opportunities for the companies accompanied by challenges. Due to an increase in the global trade, the emerging markets will expand into developed markets in coming years with the help of growing middle class and new technologies. McKinsey Global Institute (MGI) reported that the massive increase in the urbanization will enhance the growth in the emerging countries in the coming decades. Their research includes top 2,600 cities globally including the demographics, household structure, income, their contribution to activity and growth in different sectors that includes buildings construction, port infrastructure, and municipal water supply. Urban consumer will contribute around $20 trillion a year additional spending into the global economy by 2025. It is estimated that cities in emerging economy will need investment annual physical capital more than double from toady, which is nearly $10 trillion to more than $ 20 billion by 2025. Companies and governments reaction to the fastest shift in the global economy will fundamentally shape their future prospects. There is a very large opportunity for the businesses in the additional consumption and investment that will be the part of urbanization. But there will be challenges too. In the emerging world, the new urban consumers are already driving strong demand for natural and capital resources of the world. The resources and investment rate of the world have increased and can rise further. Concentrated population areas are more productive in their resource use than areas that are sparsely populated. But  in the case, cities in emerging market fail to invest in a way then the rising needs of the growing population will remain unsatisfied. Challenges for the policy makers differ according to whether they are in developing or developed economy. The task of the policy maker for the company is to manage growth in a way that they can achieve economies of scale and build the basis for sustainable economic performance. The annual consumption will rise to $30 trillion by 2025 reported by McKinsey & Company in emerging economy. 

South Asia Emerging Market Opportunities and Challenges:

China will have more impact over next 20 years than any other county. According to the current trend of China, it will be the world’s second largest and also will be the leading military power. Companies in major developing countries especially China and India have unique opportunities to be the first to develop host of emerging technologies. These opportunities for developing countries include electrical power generation and development of clean water source. The next generation of Internet and new information technologies are also present other opportunities.

Companies that will adopt these technologies early will achieve considerable economic advantage. Much of the India work force growth will come from the most poorly educated, impoverished, and crowded districts of rural northern India by 2025. The emerging countries of south Asia may face political and institutional challenges in the future years. The economic uncertainty and government or regulatory hurdles are other challenges that south Asia emerging countries can faced. Pakistan and Bangladesh also have the potential for higher growth due to the higher projected population growth rates.

An increase in the middle class in Chin provides an opportunity of political liberalization and greater nationalism. China and India are those two  , countries’ will likely to exceed the GDP of all other economies by 2025 except the US and Japan but they will continue to lag in per capita income for decades. These two countries will be powerful Asian giants around 2025 due to their rapid growth in the economy.

Middle East Emerging Market Opportunities and Challenges:

The increase in the growth of economies and population provide that there will be great opportunities for emerging market in the Middle East. The Middle East will account for almost 14 percent global raise in municipal demands in the large cities of developing countries; which is almost twice their share of urban GDP growth by 2025 according to the McKinsey Global Institute report.

The rapid growth in the developing countries will provide the opportunity of higher investment in the construction sector as well as in the educational sector. An increase in the young age of population, the retail sector, growing health and wellness trend will provide an opportunity for fruits and vegetable suppliers......................................

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