INTERNATIONAL MARKETING 6e Chapter 23 Newly Emerging Markets Copyright 2001 by Harcourt, Inc. All rights reserved. Requests for permissions to make copies of any part of the work should be mailed to the following address: Permissions Department, Harcourt, Inc, 6277 Sea Harbor Drive, Orlando, Florida 32887-6777
Copyright © 2001 by Harcourt, Inc.. All rights reserved. Requests for permissions to make copies of any part of the work should be mailed to the following address: Permissions Department, Harcourt, Inc., 6277 Sea Harbor Drive, Orlando, Florida 32887-6777
Newly Emerging market economies There are large disparities in population size and GDP per capita the former eastern bloc countries Albania 1490 Bulgaria 8.2 4,100 Czech Republic 10.3 11,300 Hungary 10.2 7,400 Poland 38.6 6800 Romania 23.3 4.050 1464 4,000 Slovakia 8300 口 Population( millions)口 GDP per capita($) Copyright 2001 by Harcourt, Inc, All rights reserved
3.4 8.2 10.3 10.2 38.6 23.3 146.4 5.4 1,490 4,100 11,300 7,400 6,800 4,050 4,000 8,300 Albania Bulgaria Czech Republic Hungary Poland Romania Russia Slovakia Population (millions) GDP per capita ($)
A Brief historical review sLenin's Trade Decree of 1918 Formalized the Soviet foreign trade system as a state-controlled monopoly The system was subsequently adopted by ° Centra/ European sate∥ tes of the USSR People's Republic of china Centralized economic control (five-year plans Unlinked the market forces of demand and supply The lack of competition resulted in inefficiencies and the misallocation of resources Distribution channels were poorly developed Copyright 2001 by Harcourt, Inc, All rights reserved
State-controlled monopolies e International trade transactions were controlled and reviewed by Foreign trade organizations, ministries of trade and state committees The monopolies resulted in High leve/s of bureaucracies Low standards of living and per capita incomes Stagnant low-growth internal economies /solation from the Western economies Copyright 2001 by Harcourt, Inc, All rights reserved
The Shift of the 1980s Exporting outside of the communist bloc was encouraged and trade with the West was emphasized. Protection from international competition was removed as Western imports were allowed entry and foreign direct investment encouraged New Soviet political and economic programs Perestroika Glasnost Copyright 2001 by Harcourt, Inc, All rights reserved
The Demise of the Socialist System ◆From1989to1992 The /ron Curtain crumbed almost overnight The communist empire disintegrated Newly Emerging Democracies(NEDs)in Central Europe and the Soviet Union began shifting to a market-based economy Communist-dominated governments were removed from political power. East Germany reunified With West Germany. The Soviet Union separated into autonomous states Copyright 2001 by Harcourt, Inc, All rights reserved
The realities of Economic Change in neds Abolishing a centrally planned economy does not create a market economy Laws permitting private sector entrepreneurs do not create entrepreneurship Reducing price controls does not make products available or affordable o Fundamental concepts of a market economy are not always accepted Laws and legal protections for property, trade and banking are not firmly in place Infrastructure deficiencies hamper growth Copyright 2001 by Harcourt, Inc, All rights reserved
Realities of Economic Change.continued Investment capital shortages are a major growth constraint Unique demand and buying habits exist minimal market information is available Substantial knowledge resources exist, there is widespread lack of management skills Managers and employees continue to follow old working patterns e The lack of a market orientation creates difficulty in managerial decision-making Copyright 2001 by Harcourt, Inc, All rights reserved
Adjusting to Rapid Change Expect resistance to change. Comprehending and understanding new linkages and interactions will not occur overnight . Inefficient firms should go into bankruptcy Increased efficiency and productivity will cause unemployment Unemployment will increase as military personnel are brought home or demobilized Emergence of a new entrepreneurial class will relegate blue-collar workers to second class status Copyright 2001 by Harcourt, Inc, All rights reserved
Adjusting to Rapid Change.continued Rising and widespread price changes may cause inflation Political and social uncertainty may produce unanticipated shifts in economic and political thinking The reduced threat of war will change the economic dynamics of all participants e Reorientation of trade flows will result as old relationships are displaced by efforts to enter global markets Copyright 2001 by Harcourt, Inc, All rights reserved 23-10
