Multinational companies are increasing looking to grow their businesses in the emerging markets. While emerging markets clearly have the potential for growth, not all compaies succeed in the emerging markets. Based upon a study done by Boston Consultancy Goup ( BCG) – the key to success often depends upon how close the MNC are to the local market – in terms of how they understand the market, whether they adapt their products to local tastes and how much they localize their management teams. A case in point is Mcdonald’s entry into India; had they just ‘lift and dropped’ their menu from the Western market, it wouldnt have been successful as beef is not consumed by the majority of Hindus. Also there is a large population which is a vegetarian. As such, Mcdonalds changed their menu to suit Indian palates and brought in some key managers from their HQ and based them in India to ensure the company stayed true to their Core values. Thus Mcdonald’s had retained their unique selling prosition and yet ‘Indianized’ the customer experience to make their business plans successful.

http://www.economist.com/news/business/21586320-ambitions-western-firms-emerging-markets-far-exceed-their-efforts-must-try-harder

http://www.medimanage.com/Images/mcveggie.jpg

Since Ben Bernanke talked about tapering of the bond buying-program, Indonesia like some other emerging markets has seen a depreciation in of the Rupiah with funds fleeing emerging markets and chasing higher yields in the USA. With the Rupiah depreciating 14%, some investors wonder if this could be a repeat of the 1998 crisis when the Rupiah depreciated 85% and several banks collapsed with the economy in a deep recession. In my view there are differences that investors must note beore jumping to any such conclusion. The Indonesian economy is facing headwinds such as declining commodity prices (coal, tin, palm oil) impactng its export earnings, yet the economy is less dependent upon exports with nearly 70% of economy driven by domestic consumption. While its true that there gas been strong credit growth of more than 20% over the last few years, its also true that the credit has been backed up by domestic deposits versus overseas funding in 1998. The banks are much better capitalized at 17% capital ratios and non performing loans are at a low 2% today. I believe these may be challenging times as Indonesia overcomes the external headwinds, but internally the country isfar better prepared than 15 years ago to weather the storm.

http://www.kinibiz.com/wp-content/uploads/2013/08/Bank-Indonesia.jpg

http://www.economist.com/news/finance-and-economics/21586307-banks-solvency-not-question-profitability-another-matter-good-times

Snapchat was developed by 2 stanford students when they found that students liked to send raunchy photos but wanted them deleted auomatically without leaving audit trail. This became popular as teenage students started using it even for messaging each other. Recently Facebook made a $3 billion bid but Snapchat declined the offer as they didn’t want to cash out as they expect the bid to be larger in the future with a growing customer base. Snapchat does not make money today, but there is potential to monetize their customer base as Facebook has done over that last couple of years. In my view, snapchat was getting an attractive offer and should have taken the Facebook offer. While the base could grow in the future, the social network scene is driven by teenagers and students who can be quick to switch the moment a new ‘cooler’ becomes available. facebook realized that their share price fell 10 % when a teenager stated on CNBC that facebook was losing its ‘cool facor’. These bubble valued ‘yet to be profitale’ companies should realize that customers, values and success can be ever so fleeting. This interesting blog by Constance Ang provided different angles yet reinforced my opinion.

http://blogs.wsj.com/digits/2013/11/13/snapchat-spurned-3-billion-acquisition-offer-from-facebook/

Abercrombie & Fitch’s main target market has always been college students. Their more politically correct version of the brand image they’re trying to sell is basically ‘cool and casual’. However, often individuals have found themselves unable to fit into the clothes they provide.

 I have got absolutely nothing against A&F’s marketing strategy. If their company chooses not to cater to customers of bigger sizes then that’s their choice. A company should have the right to create their own brand image. If being exclusive to those ‘ in shape’ or ‘toned’, so to speak, are the segmenst they want to target then fine. Furthermore it’s their loss as they are limiting their potential customer base. Plus it’s not the only clothes brand in the market, so people shouldn’t get fixated on A&F.

However I strongly disagree with Mike Jeffries comments in 2006 due to the insensitive nature of them. However it will only harm A&F in terms of their image, which is being reflected in the diminishing amount of sales, bad publicity and declining stock price. So those who felt hurt by his statements should feel a moral victory as it’s him who is suffering for showing a lack of consideration.

http://www.usatoday.com/story/news/nation/2013/11/11/abercrombie-fitch-students/3499721/

Too good to be true? One card that can electronically store up to 8 different cards in one place? In order to distinguish between your different cards, there’s a digital display that will card details corresponding to a specific card-all at the touch of a button. The creators have definitely got the ‘cool’ image and convenience factors covered. Sounds like the perfect product in a world where convenience, technology and image are arguably amongst the top most desired values customers look for in a product. Not quite as revolutionary as the iPhone where an iPod, Phone and Internet Browser were forged into one stylish product but it’s definitely a seller in my opinion. This engaging blog by G.Bensinger provided basic information about the new concept and the industry.

https://www.youtube.com/watch?v=w9Sx34swEG0

People’s financial security is of great concern in the digital age. The Coin has sought to tighten it up by using low powered bluetooth that connects your phone to you Coin and your phone informs you if you’ve forgotten it. Plus there’s an emergency setting should your Coin get lost. It’s easily the most slick idea in years. Exclusive to iPhone’s Appstore? If so, Apple might’ve hit the jackpot.

http://www.digitaltrends.com/mobile/coin-really-card-keeps-multiple-cards-safe-lets-know-gets-lost/

http://blogs.wsj.com/digits/2013/11/14/startup-coin-offers-one-credit-card-to-rule-them-all/

In a world where social networking entities such as Facebook, Twitter and Instagram have become such integral parts of our daily lives, it’s hard to envisage a future where Mark Zuckerberg’s company dwindles into obscurity. It seems unfathomable that a company which engages 1.2 billion users would not grow financially, especially considering the dynamic of the of the world we live in where it’s hard to avoid social media even if you wish to. Furthermore Facebook have made some smart investment decisions; the acquisition of Instagram being the standout that had 30 million users and now caters to 150 million people. This can only expand their customer base and further strengthen their position as the market leader of social media services.

However Facebook’s initial experience on the stock market where it “IPO’d” at $38 but saw price fall to below $20 in the months that followed, suggests investors may have doubts regarding their ability to make money without disrupting the customer experience. Companies like Twitter are posing serious threats. Additionally Ads on Facebook are perceived to be irrelevant and disruptive. Boredom is another issue amongst users that’s seen users switch to new companies like Snapchat. These factors indicate it won’t be all smooth sailing.

Releasing two ‘hit’ series is no mean feat. “House of Cards” and “Orange is the New Black” have completely changed the game for Netflix. With regards to the amount of time watched by subscribers, Netflix is effectively the 5th most-watched TV network in the U.S.A; only ABC, CBS, NBC and Fox are still ahead. This phenomenal success has been reflected in the meteoric rise in their stock price; in around 2 years Netflix’s (NFLX) share price has increased by more than 350 %. Share price is currently $349.76.

Domestically they’re thriving and this is emphasized by Netflix having more subscribers than HBO with 31 million subscribers. However their stark contrast in fortunes when their international success is analyzed is shown when comparing HBO’s international subscriber base to Netflix’s. A part of the reason could be down to the fact that U.S, U.K. and Brazil are the ‘only’ main markets they’re situated in.

However several challenges lie ahead if Netflix plan to expand into other markets, especially if they venture into Asian markets such as Indonesia and India. In countries, where ‘free online streaming’ and pirated DVDs are prevalent for astronomically low prices, Netflix faces a huge task in appealing to the audience.

http://www.cnbc.com/id/101131707

In October, when BlackBerry decided to release BBM for Android smartphones and  iPhones, BlackBerry might have dug their own grave in one of the biggest and most crucial emerging markets. BBM is the most prevalent method of communication in Indonesia and when customers were presented with the choice of abandoning their BlackBerry in favor of the more fashionable Samsung Galaxy, Blackberry’s fate was sealed in the Indonesian Smartphone industry.

BlackBerry’s position as the market leader between 2010 and 2012 diminished due to it’s inability to stay current in every facet. Since then Samsung Galaxy has risen to prominence, mainly due to the price they were offering and a superior ‘App marketplace’ provided by Google’s Android. “BlackBerry’s share of new smartphone shipments has fallen from more than 50 percent last year to less than 20 per cent in the third quarter of this year while Android phones now account for nearly 70 percent” according to a market research group called IDC.

In Indonesia, BBM was downloaded 20 million times in the first week and this poses an interesting question: Has BlackBerry consolidated it’s position in the Market Chat App? Had BlackBerry accepted their inevitable fate in the Smartphone industry? Has social networking become everyone’s primary focus?

http://www.cnbc.com/id/101204410

On November 7, 2013, the first day of trading on the NYSE, Twitter shares closed at US$44.90, resulting in the company being valued at around US$31 billion. This was up more than 73% from the initial price of $26 for each share. This was the biggest technology listing since Facebook went public in 2012. This obviously was a stunning first day for the social networking site but the most significant question remains whether Twitter will remain a fruitful investment option in the future considering it is currently a unprofitable company.

Twitter has in excess of 230 million users, which represents massive revenue-generating potential in the foreseeable future, however at the moment that potential is small due to it’s expense base resulting in a net loss. A loss of $69m was incurred by Twitter in the first six months of 2013 despite generating revenues of $254m. Twitter is unable to maximise their full potential as they’re aware that disrupting the customer experience might have a detrimental impact on their customer base.

On a side note, one advantage Twitter has over Facebook is that relative to last year, they’re perceived to have a ‘mobile strategy’ in place. Around 65% of their revenue was generated from mobile usage, as of 2013.

http://www.bbc.co.uk/news/business-24851054