STRATEGY & EMERGING

MARKETS (IBUS3109)
INTRODUCTION

S2, 2023
Presented by
Dr. Sangeeta Ray
Faculty of Business
Discipline of International
Business

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 STAFF CONTACT
UoS COORDINATOR & LECTURER

Dr. Sangeeta Ray

Email: [email protected]
Consultation: via zoom, by appointment only
Rm 4103, Abercrombie Precinct (H70)
TUTOR
Dr. Parvaneh Pirani
Email: [email protected]
Consultation: via zoom, by appointment only
Rm 4105, Abercrombie Precinct (H70)
ONLY USE YOUR SYDNEY UNI ACCOUNT FOR EMAIL
CORRESPONDENCE
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 IMPORTANT LINKS

Check the University website:

myUni Portal for students

access to support systems & essential services.

COVID safety advice

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 LECTURE & TUTORIAL
LECTURE (wk 1 – 13)
• Merewether Building, LT 2, Rm 136
• Weekly, Thursday (2 pm – 4 pm)
• 2h Lecture
• weekly recording on Canvas
TUTORIAL (wk 2 – 13)
• 1h Tutorial (individual timetable)

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 AGENDA

Basically, introduction

– Course aims and overview

– Readings
– Assessments

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 WHAT IS THIS UNIT ABOUT?

KEY FOCUS:

HOW TO LEVERAGE EMERGING MARKETS FOR

INTERNATIONAL BUSINESS

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 EMERGING MARKETS

HOW DO YOU IDENTIFY THEM?

WHAT IS THE DEFINITION OF AN EM?

WHY ARE THEY IMPORTANT?

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 ORIGIN OF THE TERM
To promote investment in developing countries

In 1981, the International Finance Corporation, a World Bank

organisation, coined the term “Emerging Markets” to promote the
first mutual fund investments in the “Less Economically Developed
Economies”

The University of Sydney Source: http:///www.ifc.org Page 8

 WHAT IS AN EMERGING ECONOMY?

Emerging Economies refers to a few low-income, rapid growth

countries that are using economic liberalisation as their
primary engine of growth.
– Hoskisson, Eden, Lau & Wright, 2000, Acad.of Management
Journal

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 GROWTH INDICATORS OF EM
Emerging markets growth indicators, are more than twice those of
developed economies

Country Average GDP per GDP Growth Population Ease of doing

Capita (annual %) business (index)
(US$)

Brazil 10,710 7.5 194.9 mil 126

China 4,428 10.4 1,338.2 mil 91

India 1,475 8.8 1,170.9 mil 132

Russia 10,440 4.0 141.7 mil 120

Indonesia 2,946 6.1 239.8 mil 129

Republic of 20,757 6.2 48.8 mil 8

Korea

World Bank
The University of Sydney Page 10
(2010 databank)
 GROWTH INDICATORS – G7 NATIONS
Developed nations – growth indicators
Country Average GDP per GDP Growth Population Ease of doing
Capita (US$) (annual %) business (index)

Canada 46,236 3.2 34.1 mil 13

France 39,460 1.5 64.8 mil 29

Germany 40,152 3.7 81.7 mil 19

Italy 33,917 1.3 60.4 mil 87

Japan 42,831 4 127.4 mil 20

UK 36,144 1.4 62.2 mil 7

USA 47,199 3 309 mil 4

World Bank
The University of Sydney (2010 databank) Page 11
 EM vs MATURE

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 Overview of the World Economic Outlook Projections %
(IMF Jan 2014)
Actual Projections
2012 2013 2014 2015
World Output 3.1 3 3.7 3.9
Advanced Economies 1.4 1.3 2.2 2.3
United States 2.8 1.9 2.8 3
Germany 0.9 0.5 1.6 1.4
France 0 0.2 0.9 1.5
Italy –2.5 –1.8 0.6 1.1
Spain –1.6 –1.2 0.6 0.8
Japan 1.4 1.7 1.7 1
United Kingdom 0.3 1.7 2.4 2.2
Canada 1.7 1.7 2.2 2.4 Actual Projections
2012 2013 2014 2015
Emerging Market and Developing Economies
EMEs 4.9 4.7 5.1 5.4
Russia 3.4 1.5 2 2.5
China 7.7 7.7 7.5 7.3
India 3.2 4.4 5.4 6.4
Brazil 1 2.3 2.3 2.8
The University of Sydney Page 13
South Africa 2.5 1.8 2.8 3.3
 Actuals Estimates Projections
2014 2015 2016 2017
World 3.4 3.1 3.4 3.6
Advanced Economies 1.8 1.9 2.1 2.1
US 2.4 2.5 2.6 2.6
Germany 1.6 1.5 1.7 1.7
France 0.2 1.1 1.3 1.5
Italy –0.4 0.8 1.3 1.2
Spain 1.4 3.2 2.7 2.3
UK 2.9 2.2 2.2 2.2
Canada 2.5 1.2 1.7 2.1
Japan 0 0.6 1 0.3

Emerging Markets & D 4.6 4 4.3 4.7

Russia 0.6 –3.7 –1.0 1
China 7.3 6.9 6.3 6
India 7.3 7.3 7.5 7.5
Brazil 0.1 –3.8 –3.5 0

Source: IMF World Economic Outlook

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 EXPECTATIONS FOR
HOME ECON. CONDITIONS & GROWTH: EMs vs DEVELOPED COUNTRIES

Source: McKinsey
& Company. (2018, March). Economic Conditions Snapshot, March
2018: McKinsey Global Survey results. Retrieved from https://www.mckinsey.com

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 EXPECTATIONS FOR
GLOBAL ECON. CONDITIONS & GROWTH: EMs vs DEVELOPED COUNTRIES

Source: McKinsey
& Company. (2018, March). Economic Conditions Snapshot, March
2018: McKinsey Global Survey results. Retrieved from https://www.mckinsey.com

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EXPECTATIONS FOR GROWTH IN TRADE: EMs vs DEVELOPED COUNTRIES

Source: McKinsey
& Company. (2018, March). Economic Conditions Snapshot, March
2018: McKinsey Global Survey results. Retrieved from https://www.mckinsey.com

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 BRIEF: CHINA AND INDIA
The power of two,

China and India are the biggest contributors to world economic

growth.
–world’s largest & fastest growing economies.
–biggest growth opportunities for almost every product or service.
–poorest economies in terms of per capita income. (Lowest wages)
–world’s largest producers of science & engineering graduates
(intellectual capabilities without proportionate increase in cost
structure)
–breeding ambitious global organisations that are changing the
global competitive dynamics.

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 ECONOMIC BACKGROUND
GDP Growth
– China: On an average 10-11% for last two decades
– India: On an average 7% (9% after 2003)

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 ECONOMIC BACKGROUND
Structure of GDP
– India: Services
– China: Manufacturing

60% Agriculture Manufacturing Service 60%

50%
50%

40%
40%

30%
30%

20%
20%

10%
10%

0%
0%
1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

1978 1982 1986 1990 1994 1998 2002 2006

The University of Sydney India China Page 20

 SUCCESSFUL EMNES: EXAMPLES
CHINA
–Chery Automobile
–Huawei – communication – Cisco
–Haier Group , home appliances
–Lenovo – PCs, 3rd largest behind HP and Dell

INDIA
–Infosys
–Tata Steel
–Bharat Forge
–Suzlon Energy
Suzlon Energy - Wind farm

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 PROJECTED WORLD ECONOMIC STRUCTURE
(% OF WORLD GDP)

2004 2025 2050

United States 28% 27% 26%

European Union 34% 25% 15%
Japan 12% 7% 4%
China 4% 15% 28%
India 2% 5% 17%
Other Countries 20% 21% 10%

Source: “Reshaping the world Economy” BusinessWeek, Aug. 22, 2005

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 GDP LONG-TERM FORECAST
2017 (million USD) 2020 (million USD) 2050 (million USD)

USA 16.4 17.7 32.3

EU 10.6 11.2 18.4

CHINA 15.1 17.7 45.7

INDIA 5.3 6.3 27.8

Source: OECD (2017), GDP long-term forecast (indicator). doi:

10.1787/d927bc18-en (Accessed on 02 August 2017)

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 OPPORTUNITIES IN EMERGING MARKETS

1. MEGAMARKETS WITH POTENTIAL FOR SUSTAINABLE

GROWTH

2. COST-EFFICIENCY PLATFORMS.

3. INNOVATION PLATFORMS.

4. LEARNING TO COMPETE THE NEW BREED OF GLOBAL

COMPETITORS - EMNEs.

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 CHALLENGES IN EMERGING MARKETS

1. INSTITUTIONAL WEAKNESSES & VOIDS

2. INADEQUATE PHYSICAL INFRASTRUCTURE

3. RISKS

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 SO, THE QUESTION IS….

HOW CAN WE EFFECTIVELY LEVERAGE EMERGING

MARKETS FOR INTERNATIONAL BUSINESS?

AND THE ANSWER IS….

“EXPLORING STRATEGY IN EMERGING MARKETS”

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 AIM OF THIS UNIT (UoS OUTLINE)

To provide conceptual frameworks & evidence from practice

that will develop

– understanding opportunities and challenges in emerging

markets

– alternative strategic approaches for leveraging emerging

markets for international business

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 RELEVANT QUESTIONS
1. What is unique about emerging markets?

2. How do western businesses participate in emerging markets

and exploit them to improve their own global competitiveness?

3. How do businesses from emerging markets seek to compete

internationally?

4. What are the implications of the rapid globalization of

emerging market firms for global business?

5. How will the economic landscape be affected as a result of

this phenomenon over the next several decades?

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 LECTURE TOPICS (IBUS3109)

wk 2 - Opportunities in EMs
wk 3 - Challenges in EMs
wk 4 - Institutional Environment in EMs
wk 5 – Strategies for Responding to Institutional Voids
wk 6 – Winning Strategies in EMs: Lessons from Business Groups
wk 7 – Global Value Chains & EMs
wk 8 – Strategies for Managing Risks in EMs
wk 9 – Catch up by EMNEs
wk10 - Internationalisation Strategy of EMNEs
wk 11 - Corporate & Management Systems: China
wk 12 - Corporate & Management Systems: India
wk 13 - Bottom of the Pyramid

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 MULTIPLE LEARNING PATHS

As an individual:
Lectures and Readings
In-Class Activity/ Q&A

As a group:
Group Project
– In-class discussion of cases & scholarly papers
– Analytical report

Not Permitted
Use of AI Tools (Generative AI, ChatGPT) is not
permitted in any assessment/ assignment in this unit.

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 LECTURES & TUTORIALS
Lectures:
Content
Related to readings
In-class discussion/ Interactive

In-Class activity/ Assessment:

Quiz, Q&A
Research by group & peers
Related to case readings
In-class discussion/ analysis

Not Permitted
Use of AI Tools (Generative AI, ChatGPT) is not permitted in any
assessment/ assignment in this unit.

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 WHERE ARE MY COURSE READINGS?

Readings:

– Reading List on Canvas

– Case studies for Assignment will be made available in wk 6

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 Get a head start on
finding information
for your assignments!
Free short online course:

bit.ly/MASScourse

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 REFERENCING STYLE FOR BUSINESS SCHOOL

– APA 7th is the designated referencing style for students in the Business
School.

– Library has a summary guide which covers the most common types of references
e.g. books, journal articles, and websites.

• A range of other APA support materials can be accessed via -

https://libguides.library.usyd.edu.au/business_literature/help

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 PROGRAM LEARNING OUTCOMES

1. Business Knowledge
2. Critical Thinking
3. Business Analysis & Problem-Solving
4. Communication
5. Information Skills

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 WHERE DOES YOUR FINAL GRADE COME FROM?

ASSESSMENT WEIGHTAGE

Individual work:
Mid Term Review (Small test in wk 8 - MCQ, Short Ans) 15 %
Final Exam (Extended & Short answer) 50 %
In-Class Activity & Quiz 10 %

Group work:
Group Project 25 %
Case Presentation (10 marks)
Analysis Report (15 marks)

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 GROUP PROJECT (25 %)
What?
Each group analyses & presents a real life case using relevant
conceptual frameworks and submits an analytical report.
Peer review affects individual mark
When?
In tutorials over weeks 9 – 13
Why?
• Present insightful analysis of strategies & managerial practices
for effectively leveraging EMs for international business.
• Write concise analytical report

Not Permitted?
Use of AI Tools (Generative AI, ChatGPT) is not permitted in
this assignment.
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 Academic integrity
- Core value of the University of Sydney, in both education and research.
- Doing the 'right thing' even when things seem difficult
- Contributing your own original work to group work and properly acknowledging
the work of other people Get the most out
- Committing fully to participating in group discussions and meeting agreed of your degree
deadlines studies!
- Legitimate cooperation that is open and transparent
- Understanding the integrity expectations for online exams
- More information: https://sydney.edu.au/students/academic-integrity.html

Strategies to act with academic integrity

– Planning – Know your – Quoting, Stay in touch Knowing when

and time strengths and paraphrasing with your and who to ask
managem understand and classmates for help
what skills you referencing;
ent Using citations and teaching
need to
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develop and references staff Page 38
 Learning resources
• Learning Centre: • Disability support:
https://sydney.edu.au/stud https://sydney.edu.au/stud
ents/learning-centre.html ents/disability-
support.html
• Study skills at the
• Counselling and mental
University: health support:
https://sydney.edu.au/stud https://sydney.edu.au/stud
ents/browse.html?category ents/counselling-and-
=your- mental-health-support.html
studies&topic=study-skills
• Student Representatives
• Library: Council:
https://library.sydney.edu. http://srcusyd.net.au/src-
au/ help/
• Special • SUPRA
https://supra.net.au/get-
consideration and help/
arrangement: • Peer-assisted study
https://sydney.edu.au/stud
ents/special-
sessions
consideration.html https://sydney.edu.au/stud
ents/pass.html
• Peer learning
advisors
https://library.sydney.edu.
au/help/pla.html
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 UNIT LEARNING OUTCOMES
– Research, evaluate & interpret information to identify
relevant issues & new business opportunities in EMs

– Apply unit content to propose well-justified solutions or make

strategic choices to typical issues faced in EMs

– Apply unit content to formulate strategy to leverage EMs for

IB

– Integrate multiple perspectives to guide strategy formulation

& managerial practice in EMs for promoting IB

– Lead/ Contribute to well informed & insightful presentations

or analytical discussions on strategies to leverage EMs for IB

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WIL Hub Canvas site: https://canvas.sydney.edu.au/courses/19623

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 THE END

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