Expanding an MNC

Expanding an MNC

About the company

Eureka is a US based Multi-national Corporation that manufactures electric appliances. The firm has its global presence in more than 20 countries across the globe. It has huge market in European continent, as well as, the United States. It covers product ranges of all categories of electric appliances, and products are well-known for their low consumption of electricity, as well as, longer life. The product design is a key differentiation point, along with durability and low electric consumption, to deliver the customer a paramount exchange of value for money. In the year 2012, the company earned sales revenue of $13 billion, and net profits came up to $ 6 billion. Although, in a concise timeframe of five years, the company managed to acquire huge market share, as well as, brand equity and customer loyalty.

As per the statistics and market surveys, it has a huge growth potential in the emerging markets, namely, China, India and Russia. The company has enormous likelihood of building a sound consumer base, as well as, hitting huge revenue gains in these three markets, respectively. The emerging markets chosen are in phase of rapid industrialization and double-figured growth. The paper attempts evaluate all three economies on the basis of a matrix, and make choices of the economy that is most feasible for business expansion, in terms of, sustainable success (Kannan & Henry, 2008).

Comparison of emerging markets

To assess the feasibility of three chosen economies, the matrix is given as under;

The assessment has been done on the basis of comparison matrix

India

It has Capitalist system and open market economy. The political environment of the country encourages industrialization; however, it has a low-scale chaos. The legal environment of the country has mismanagement, as well as, unqualified people. Ethically, people are low at business ethics; however they are value-oriented but intolerant towards other communities. The technological environment of the country encompasses of high feasibility, that is, it has the lowest prices for building technological infrastructure. The social responsibility indicators are very high, that is, country needs social development and encourages social spending. Finally, the country possesses exotic cultural heritage with royal civilization, however, it is not open to newness and other cultures.

China

The Chinese economic system is based upon economic socialism, that is, state capitalism with a mixed-economy market. The political system is extremely supportive for foreign direct investment, as well as, new business ventures coming in. There are specially designated policies for emerging and foreign businesses. Government is the sovereign authority and legal system, as well as, judicial execution lasts the domain of the government, however, the system encompasses of clauses that encourage FDI and economic activity through foreign businesses. The economic boom and accelerated growth pulled the country into technological development, the country possesses one of the most highly technology oriented loop for business development. The ethical system of China pertains to Confucius preferences, and therefore, fairness and transparency is regarded highly, however, the country has a high corruption ...