globalEDGE International Business Blog

The Michigan State University Center for International Business (MSU-CIBER) has recently released the 2009 Market Potential Index for Emerging Markets (MPI).

The study focuses primarily on emerging markets, designated by The Economist magazine. A market is determined to be an emerging market based on the distinction that it is on the cusp of transforming into a developed nation from a developing one. The economies of these nations comprise over half of the world’s population, provide a large share of the world’s output, and generally have very high growth rates in their economies, which are all key aspects of market potential.

The MPI compiles statistics from a variety of sources and then analyzes them according to eight dimensions:

Market Size
Market Growth Rate
Market Intensity
Market Consumption Capacity
Commercial Infrastructure
Economic Freedom
Market Receptivity
Country Risk

These dimensions are found to be one of the best ways to indicate how poised for growth a country's market is, and subsequently, which markets are ideal to enter into for the international business person.

Many companies consider Africa as a dangerous place to do business. This is mainly because there is a lot of negative publicity that surrounds the place and people tend to hear and remember it better than all the positives in the region. Viewing Africa as an unworthy place to expand a company's market is a huge mistake.

You may be surprised to learn that Brazil produced half of the world's coffee at one point. Although the nation doesn't enjoy this kind of pick-me-up dominance anymore, they still are the key player in the global market, and produce one-third of world's coffee beans. Despite the shear quantity of coffee coming out of Brazil, most consumers are more familiar with  Columbian beans, and Asian and African beans seem to be gaining in popularity. It's said that because of Brazil's large-scale production, the quality suffers. Poor quality controls and an economic crisis in the 80's and 90's led to less local consumption in Brazil. Their best beans were exported while they had the leftovers. I can see why coffee didn't appeal very much to Brazilians. In response to this unfavorable trend, the Brazilian Association of the Coffee Industry initiated a "coffee purity" program that was so succesful that it was expanded to 60 countries. That led to a more than doubling of sales in Brazil. Brazilians now consume more than any other nation with the exception of the United States.