Now What? Which Emerging Market is Right for Your Business?

When most people think of emerging markets they instantly think of the most famous four: China, India, Brazil and Russia. All have had staggering economic growth in recent years and continue to have great prospects for the future. However, are these necessarily the best countries for your business? The Market Potential Index by MSU-CIBER gives entrepreneurs an alternative to guessing by offering a comprehensive ranking tool that helps answer the question, “Now What?”

The index rates 26 emerging countries on a variety of factors and gives an overall ranking based on an adjusted weighted average. The top ten include the usual contenders such as Hong Kong, China and India, but how much do you know about Poland in sixth place or the Czech Republic in fifth place?

Poland has been privatizing many state-owned companies since the 1990s and encourages the development of small and medium business. The MPI has highlighted Openness (ranked 7th) and Economic Growth (ranked 13th) as the main factors swaying international companies to seek opportunities in Warsaw, Poland’s capital. One such example is the recent conversion of the Felix Hotel in downtown Warsaw to a Best Western. Best Western recognized the opportunities in Poland and was willing to endorse a Polish hotel with its name in order to exploit the growing amount of business travel to the country.

The MPI has also signaled huge potential for Czech Republic's future growth by ranking them second in Market Consumption Capacity, second in Commercial Infrastructure, and third in Economic Freedom. Economic growth can already be witnessed by the increasing amount of premium goods being sold in the Czech Republic. One example is local entrepreneurs selling premium beer though an increasing amount of microbreweries. In 1989 there were only 65 such breweries.  However, this number has surged to 104 breweries today!  The MPI can be used to highlight that the Czech Republic still has market capacity and may be a great place to start a business.

So before your business rushes headfirst into emerging markets, take a lesson from history and remember that many investors have gotten burned by rushing into emerging “gold” markets that they didn’t understand. Make sure to look at all your options and use the MPI to gauge which market would be best for your business.