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Emerging Markets lectures and weekly videos summary week 1, 2 and 3
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Emerging Markets lectures and weekly videos summary week 1, 2 and 3. For Msc IBM
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EM LecturesWeekly video (week 1) what is strategy
What is strategy?
Core objective of the course:
- To develop an understanding of strategy related aspects of emerging markets
- What is ‘’strategy’’?
o Unilever offers discount of up to 20% on its range of products: tactics or
strategy?
o P&G acquires Gillette for $57 billion: tactics or strategy?
o Selecting Emerging Market as an elective: tactics or strategy?
- How to distinguish from ‘’tactics’’ or ‘’plan’’?
How to distinguish strategic from other types of decisions
- Look at who makes the decisions
- What is the nature of the decision being made? Simple routine or complex non
routine decision?
- Short term or long term?
- Paper of this week shows how to distinguish strategic decisions from other types.
How large is the impact on the scope of the firm (defined by where (e.g. market or
product), how (decision impact) & economic value is captured or created) by the
decision) and what is the extent of commitment (new investments (big), new
relationships (JVs), new promotions (ads) and new policies & procedures (systems,
structures))?
, Strategy vs tactics
Strategy: grand view that only the strategies know enough (birds view). Largely invisible to
others, ongoing in someone’s mind.
Tactics: a path taking you from one point to another. Is known by everyone.
In the context of this course:
Strategy is the dynamics between ‘firm’ and ‘environment’ due to the ‘actions’ taken and the
use of ‘resources’ in order to achieve goals (increase performance).
Weekly video (week 2)
Emerging market features
a. Frequent market failures (Khanna & Palepu, 1997)
a. Information problems.
i. E.g. buyers and sellers fail to either meet or agree on a price
b. Misguided regulations (political gains over efficiency)
i. E.g. controversial allocation of 2G spectrum to telecom companies in
India in 2008
c. Inefficient or lax enforcement agencies
i. E.g. judicial delays, corrupt bureaucrats.
b. Rapidly evolving institutions
a. Unexpected events
i. E.g. Asian financial crisis (1997), India & Russia debt default (1990s)
b. Dismantling existing systems and building new ones
i. E.g. new system for tax collection in India (2017); privatization and
listing of firms in Chinese stock exchanges
c. Political and economic instability/uncertainties
i. Unstable governments: India (1990s) witnessed 4 national elections
and several governments
ii. Unstable ideologies: Argentina in 90s, Brazil in 2010s
c. Underdeveloped strategic factor markets
a. Capital markets: high costs of capital, forex restrictions
b. Labor markets: shortfall and mobility constraints
i. Labor regulation and policies (how easy/difficult to hire and fire?)
Human resource demand and supply
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