Impact of Emerging Economies’ Growth

Need Help With your assignment? Get expert academic writing assistance! We can write any paper on any subject within the tightest time.

Hire A Writer

Impact of Emerging Economies’ Growth

Countries outside of the Organization for Economic Co-operation and Development contribute to more than fifty percent of the global GDP growth (Muller, 2018). Also, more than fifty percent of the urban population comes from these developing economies. A good example of a promising emerging economy is Vietnam, which recorded the highest GDP growth between 2018 and 2020 in SEAN and ranked as the seventeenth most populated country (Vietnam News, 2021). These factors translate into increased demand for food in emerging economies due to income growth and adaptation of “rich-country diets,” including processed foods high in proteins and calories. According to FAO, diets in developing countries change when incomes increase. This results in a decline in share for staples such as tubers and cereals and a rise in meat and dairy consumption (FAO, 2020). Projections suggest that pa capita consumption of animal products might increase by forty-four percent by 2030.

Consumer behavioral changes often impact multiple industries and overall economic growth. For instance, the demand for proteins in emerging markets, particularly pork in China, will increase rapidly, creating opportunities for companies to expand their production and related industries such as vaccines, feeds, animal-health testing, and breeding. This phenomenon also applies to Brazil, where beef and animal production has expanded significantly in the recent past to meet the high global demand (Tanchua, 2015). Therefore, increasing feed conversion efficiency to help animals produce more meat without increasing feed amount can be a lucrative business for companies with unique intellectual property. Big, innovative, and well-equipped multinational companies can capitalize on the new opportunities in emerging economies. These markets can be leveraged to facilitate long-term growth, especially in China, Brazil, and India, where different consumer cantered industries are likely to benefit. Companies can alleviate associated risks through partnerships like franchises and joint ventures. Successful implementation of expansion strategies in emerging markets can increase sales and geographical diversification.

It is important to note that developed economies continue to be valuable markets because of relatively higher demand stability, sizeable middle class, and established population. However, these countries have limited opportunities for the growth of consumer-centered companies. For instance, in the 90s, developed economies accounted for sixty-five percent of the global GDP but have been overtaken by emerging markets (OECD, 2010). This explains why most multinationals seem to mainly target countries where the middle-class population is increasing rapidly. However, opportunities are also accompanied by risks. High prices in emerging economies, government policies, and environmental factors could negatively affect the demand. Furthermore, consumer preferences and behaviors can shift rapidly, making it difficult for companies to adjust their strategies according to changing market needs.

Need Help With your assignment? Get expert academic writing assistance! We can write any paper on any subject within the tightest time.

Hire A Writer

Place this order or similar order and get exceptional paper written by our team of experts at an affordable price

Leave a Reply