Challenges and opportunities of new retail horizons in emerging markets: The case of a rising coffee culture in China

Economic growth and a rising middle class consumer base make emerging markets an attractive prospect for many international businesses. Changing patterns of retail in these countries present opportunities for business expansion that many are keen to capitalize on, but also present challenges for reaching their ambitions. This article examines the growth of the coffee shop industry in China—considering its key dynamics and drivers—in order to address questions about successful retail expansion in emerging markets. We aim to explore how changing consumer cultures have contributed to a rapidly growing industry and what strategies businesses have used to enter the market and maintain growth, as well as considerations for potential retail success in the future.     

Examining the economic growth and the middle-income trap from the perspective of the middle class

In recent decades, while some countries have been growing consistently, others were not able to keep high growth rates and got stuck in the “middle-income trap.” This study aims to explore the relationship between the middle class and the persistence of economic growth, and understand the role of the middle class in avoiding the middle-income trap which is a serious threat for many emerging markets, yet an understudied topic in the academic literature. Our findings suggest that the key growth factors including the middle class, innovation, productivity, and foreign direct investment have diminishing marginal effect on economic growth. Moreover, the middle class plays an important role in avoiding the middle-income trap. We also find regional differences in the middle-class growth and economic evolution of emerging markets over time. To our knowledge, this is the first study examining the relationships between the middle class, economic growth, and the middle-income trap.     

International strategy and business groups: A review and future research agenda

Motivated by the growth and internationalization of business groups, this paper reviews the business group literature and presents a future research agenda, highlighting their implications for international strategy. The paper identifies theoretical tensions and empirical ambiguities around three key business group features—corporate governance, internal markets, and corporate strategy—and three key outcome variables—performance, economic impact, and innovation—that have generated significant debate. We conclude with three methodological concerns relevant to these debates: generalizing business group research across countries, endogeneity in business group research, and performance measurement in business groups.     

Mapping the trading behavior of the middle class in emerging markets: Evidence from the Istanbul Stock Exchange

Predicted to grow above 4.9 billion by 2030, with an overall spending capacity of $56 trillion, the rise of the middle class in emerging markets has attracted global practitioner and academic attention. How this new wealth will be invested is a central question; yet our understanding still remains fragmented. Drawing on the literatures of international business, behavioral economics and finance and using high-frequency stock market data, we examine and map the trading behavior of the middle class in Turkey, one of the fastest rising economic powers of the East. We find that middle class traders exhibit discernible differences to professionals, with respect to risk attitudes and stock preferences (e.g. prefer lower-risk, smaller-size and ‘value’ stocks). In addition, while they typically hold small portfolios and tend to realize lower gains than professionals, their role has become considerably influential to the direction of the entire market.     

Foreign direct investment,institutional quality,economic freedom and entrepreneurship in emerging markets

This study investigates the relationship between foreign direct investment, institutional quality, economic freedom, and entrepreneurship in emerging markets. The research compares the capacity and appetite for business creation among high-income, low-income and emerging countries. The results are based on a panel study of data, from 2004 to 2009 for 87 countries, using as its source “The World Bank Entrepreneurship Snapshots” to look at the connection between business creation, institutional quality, market freedom and foreign direct investment (FDI). The findings reveal a strong positive relationship between institutional quality and business generation in all three of the above categories. The freedom to create businesses and invest has an impact on business generation in emerging countries, while the influence of international trade appears more important as a spur to the genesis of business in low-income countries. Finally, there is a direct and significant relationship between FDI and business development in emerging countries. This result is consistent with “the spillover theory of entrepreneurship” (,  and ).     

The strategies of small and large international specialists

Falling trade barriers and corporate restructuring are resulting in the creation of international specialists, firms that focus on one line of business but with an international scope. International specialists compose the growing middle ground between diversified multinational companies and local firms. This study of 41 firms identifies two types—large and small international specialists—that differ substantially in their governance structures, resources, functional strategy, and approach to international markets.Large international specialists have abundant resources and high growth expectations, make a concerted push to dominate worldwide markets, and increase their reach over multiple stages of their industry. Small international specialists do not have strong growth motivations. They are upstream players that outsource extensively, serve intermediate users, and enter international markets selectively in ways that conserve their limited resources.Managers should consider the strategic option of becoming an international specialist in addition to the known strategic alternatives of being a domestic or a diversified multinational firm. To become international specialists, strategists need to implement several, consistent actions across functions that reinforce one another.     

Services, growth poles and advanced economies

In the twenty-first century, nearly 70% of new jobs in the US have been in services, matching worldwide expansion of the services sector. This paper discusses the role of services in advanced economies internationally as a vehicle for ongoing growth and prosperity. The discussion will be frames through pole theory. Contributions of private, profit driven service activity is assessed. Services provide stability while contributing to the growth process, and may constitute growth poles on their own as in money markets and insurance. Services facilitate business and business change, both in domestic and international markets.     

Understanding the rise of global protectionism

The past three decades are generally regarded as a period of widespread liberalization and high growth within the world economy. On a wide range of measures, this era has seen the rapid globalization of business and the lifting from poverty of a large number of the world's poorest, particularly within large emerging markets such as China and India. While the undoubted benefits of globalization are widely recognized for raising economic growth rates and engaging a much larger number of nations in international business activity, globalization has always had its critics. The purpose of this article is to explore the recent rise in protectionism—what has been termed “global protectionism”— to examine how it differs from traditional forms of trade protectionism, and to offer some tentative assessment of its determinants. ©2011 Wiley Periodicals, Inc.     

Best practice network business model for internationalization of small and medium enterprises

Small and medium enterprises’ entry to international markets leads to their continuous growth and facilitates national and global economic development. In an attempt to substantiate these outcomes, they seek to acquire best practices and experiences in order to facilitate entering, surviving, and growing in global markets. To address this challenge practically, the present paper introduces a media for networking and a system for transferring internationalization best practices across small and medium enterprises under the concept of Best Practice Network. Subsequently, the paper tries to depict Best Practice Network as a viable business and establish a guideline for implementing it by developing its business model. To achieve this objective, the authors have administered multi-case study research among the top managers of international small and medium enterprises in the information and communication technology sector of Iran. The resulting model is based on business model ontology and proposes a bird’s eye view of the Best Practice Network including product, customer interface, infrastructure management, and financial aspects. Moreover, by proposing a media for sharing related best practices, this paper can lead to the decline of the stage theory of internationalization and can excel the born global theory of small and medium enterprises.     

Aspirations and entrepreneurial motivations of middle-class consumers in emerging markets: The case of India

The world is eyeing emerging markets where increasing numbers of consumers are entering into a new segment called the middle class. In emerging markets, this new segment of the population, as it moves up the economic ladder and seeks a better life, is considered the backbone of the economy. In this study, India is chosen because its economic progress, and changing cultural and demographics shifts, have set the stage for fundamental change of the country's middle class consumers, who are exhibiting new life-aspirations and entrepreneurial pursuits. While India's middle class continues to grow in size and importance, the existing research fails to fully address questions regarding their aspirations or life goals, entrepreneurial motivations, and demographic characteristics.This study attempts to fill the void by focusing on life goals, attitudes, and behaviors of the middle class consumers. Specifically, this study focuses on their aspirations and entrepreneurial motivations. The data collected from India reveals interesting insights about this important segment of India's people. Their demographic profiles suggest that they are well-educated, employed full-time and own assets. Furthermore, these middle class consumers express their confidence in attaining life aspirations such as financial success and personal growth. They tend to seek more opportunities for accomplishing life goals and display entrepreneurial motivations.     

Transforming Business Models in Fast-Emerging Markets–Lessons from India

There is a need for understanding the entrepreneurship and business models in the emerging economies, especially the fast-expanding ones, from a different perspective as compared to the developed economies. The consistent gross domestic product (GDP) growth rate, significant socioeconomic potential, untapped needs of the population, and economic growth potential in the fast-expanding emerging economies like the BRIC nations (Brazil, Russia, India, and China) have changed the paradigm for investment, thereby creating a new economic development reality and focus for the global companies. However, achieving success in these emerging markets has its own unique mix of challenges. This requires a transformative and innovative mind-set toward conceptualization of a working business model that can fit into the reality of the socioeconomic and cultural challenges of these emerging markets. Further, the business model changes and alignment in these emerging markets require closer analysis and understanding of the global trends as well as ability to leverage the emerging technologies and linkages. The objective of this article is to explore the magnitude of opportunities and emerging business models transforming the socioeconomic landscape in fast-expanding emerging markets. In doing so, the article attempts to provide an overview of the emerging business model typologies and patterns that will enable the global companies to make better-informed decisions and build their presence in the fast-expanding emerging markets. © 2015 Wiley Periodicals, Inc.     

The new middle class in emerging markets: How values and demographics influence discretionary consumption

The rise of new middle‐class consumers in rapidly transforming emerging markets has attracted the attention of Western business executives. What they know about this growing segment of customers will determine whether they succeed or fail in these markets. The present study examines the factors that drive the discretionary consumption of this new middle class, including the effects of consumerist values, religious values, occupation, education levels, and ownership of fixed assets. The study draws its insights from data gathered from 391 new middle‐class consumers in Ankara, the second‐largest city in Turkey. The findings provide important implications for businesses, both indigenous and foreign. An overall implication is that managers ought to understand and qualify the new middle class in emerging markets not simply by their access to disposable income but by deeper attitudinal and behavioral characteristics.     

Alibaba: Entrepreneurial growth and global expansion in B2B/B2C markets

The purpose of this case-based research is to analyze and discuss Alibaba Group (hereafter Alibaba) and its entrepreneurial growth and global expansion in B2B/B2C markets. The paper uses company and industry-specific data and surveys to analyze a fast growing Chinese B2B/B2C firm and its internationalization and expansion in global markets. Findings of the work reveal that in a short time, Alibaba has become a major entrepreneurial icon and global player and continues to grow worldwide because of its well-planned business initiatives and B2B/B2C-based business models. The paper also provides implications in the area of international entrepreneurship and its related areas. International entrepreneurs need to learn from Alibaba’s fast growing business model and dynamic growth because of its competitive platforms and Web-based strategies which helped the company to target small and medium-sized enterprises (SMEs) in global markets. Within the areas of international entrepreneurship and international business, the paper also provides discussion which deals with the changing e-commerce industry and its future growth and developments.     

Latin American franchise internationalization: The impact of institutional environment

We analyze the internationalization of Brazilian franchise chains in Latin America. A total of 119 observations verify international commitment in each country in relation to institutional environment factors and how they are moderated by chain size and industry. The results show that despite all institutional aspects having a significant effect, their explanatory power depends on chain size. Larger franchise chains usually choose countries with better institutional aspects in terms of contract compliance and business freedom, even if the efficiency of business conditions in these countries are not the best in Latin America. In this study, were used public data from international organizations that report on the ease of doing business, level of corruption, political risk, and legal regulations. Specifically, it contributes by using institutional theory in franchising in order to understand the process of chain internationalization originating from emerging markets. Our results, in part, contradict the idea that the origin disadvantage is always an advantage of internationalization.     

International acquisitions and emerging market firms' performance—a structural contingency perspective

Entry modes have impact on firms' performance in international markets. Using an organizational structural contingency perspective, we assert that firms with mechanistic structure can enhance their performance in international markets if they choose acquisitions as an entry mode. Mechanistic structure limits organizations' learning capability, which can be managed through acquisitions but not through other entry modes such as joint ventures. For managing limitations associated with the poor knowledge absorption capability of mechanistically structured organizations, firms should not follow the standard integration procedures associated with acquisitions aiming to achieve economies of scale or scope. Rather, they should provide corporate parenting advantage to the newly acquired unit by (a) granting complete autonomy and (b) contributing required resources for future growth, thus treating the acquired business as a strategic business unit. Since mechanistic structures are more common in emerging markets, we explain our perspective using illustrative caselets from these markets.     

Transaction services and SME internationalization: The effect of home and host country bank relationships on international investment and growth

Building on the argument put forward by North and Wallis (1994) that the transaction sector enables economic growth by lowering the costs of transacting, we investigate how internationalizing firms’ host and home country bank relationships affect their international specific investments and growth. Banks provide payment, liquidity, and risk management services, which are essential to international business relationships, yet little is known about how banks affect international business relationships. In a sample of 255 small and medium-sized enterprises (SMEs), we find that host and home country bank relationships affect the dependent variables differently. We contribute to the literature by explicating the role and effects of banks in international business relationships. Our findings have implications for understanding transaction services in international business as well as the choices made by their customers.     

Consumer Trust,Social Marketing and Ethics of Welfare Exchange

The global corporate scandals such as Enron, Worldcom and Global Crossing have raised fundamental issues of business ethics as well as economic, social and anthropological questions concerning the nature of business competition and global capitalism. The purpose of this conceptual paper is to introduce the concept of “welfare exchange” to the existing notions of economic, social and anthropological notions of business and exchange in markets and society in the 21st century. Global competition and business success in the 21st century continue to raise the nature of economic value and the interaction among diverse actors in international markets, institutions and society. We believe that the nature of such exchange between consumers and organizations, which can also be termed social marketing, need to increasingly take into account a welfare and ethical component. In this paper, we introduce our concept of welfare exchange to emphasize the importance of such welfare and ethical issues in the global business environment of the 21st century.     

The economic factors behind international legal harmonization: a jurimetric analysis of the Latin American experience

This paper shows that the international harmonization of commercial legal rules and commercial legal standards in Latin America have been the result of very specific legal and economic country-specific factors. The paper proposes that international legal harmonization within a regional bloc of countries is a function of the convergence of three broad conditions: (1) first, the a priori international country-to-country compatibility in the form and scope of their legal rules applied to domestic commercial transactions; (2) the emergence and growth of intra-sectoral international markets supported by foreign direct investment; and (3) the emergence and growth of domestic trade-related industries seeking compatible legal rules in their exporting markets abroad. A jurimetric model is introduced showing that the drive to seek international legal harmonization has been explained by these specific economic and legal domestic factors.     

Culture, freedom and economic growth: Do cultural values explain economic growth?

Economic freedom, the ability of a society to conduct business in an unfettered manner without government intrusion, is a key determinant of economic success, but national culture, too, is thought to play a significant role in shaping a nation's business environment. This article combines data from a bench-mark report, the Index of Economic Freedom, with two competing measures of national culture to posit a significant relationship between measures of culture, economic freedom, and economic growth. We discuss the implications of this relationship for business and for further academic research.