Emerging Market Penetration

Updated: Sep 25, 2020

Emerging markets present opportunities for foreign countries to increase their growth and innovation. But moving to an emerging market can be very difficult. This video provides some tips and tricks that will help you move to an emerging market.


Despite political tensions around globalization, companies in the U.S. continue to look to emerging markets as a way to rapidly expand, access low-cost resources and come up with innovative ideas. In fact, a recent survey showed that since 2016 companies have continued to become more interested in expanding into emerging markets. On one hand, 78% of the companies surveyed are concerned with negative attitudes by global governments toward trade with emerging markets. On the other hand, these same companies are also quite optimistic about the global economy and opportunities to move into emerging markets. Some of the emerging markets U.S. companies are interested in expanding to include Mexico, China and India. Other emerging markets to watch as future business hotspots include Bangladesh, Egypt, Ethiopia, Indonesia, Kenya, Myanmar, Philippines and Vietnam.


Once a company decides it wants to enter an emerging market, a good first step is to analyze the PEST gaps within each prospective country. PEST stands for political, economic, social and technological. Emerging markets are notorious for having many gaps in their political, economic, social and technological factors.

For example, one political gap can be the lack of a regulatory environment or legal system that enforces contracts. Economic gaps might represent a weak and fluctuating currency. Social gaps represent cultural norms that may favor bribes or not encourage telling the truth. Finally, technological gaps can be found in weak internet connectivity or poor roads. Because of such gaps, companies find it particularly challenging to survive in emerging markets, but a detailed analysis can make a global business aware of the challenges ahead and help them engage in international business in a thoughtful, prepared manner.


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