Doing Business in Emerging Markets
The paper presents three cases that look completely different at the first sight. But after a while it turns out, that there are many similar points in both of them. So in the first three parts the cases would be analyzed separately and in the and as a conclusion I also depart from the similarities.
Case study Karosa
Central and East European (CEE) car industry has traditionally been at the periphery of the Western European production. Except for the World War II, the building of the military vehicles boosted the production. After the World War II, the development and the production was affected by many important factors, in connection with the Soviet Empire. The plants were in state ownership, the industry was central planned and the workers were demotivated, however they were well prepared for their jobs. The qualities of the products were poor, but no one cared about it, because most the cars, and other commercial vehicles were exported to the other Soviet member states. The number of sales was rising instantly because of the growing demand from every state. But we are wrong if we think that , the Eastern car manufacturing was significant in the world. Their share in the world market was only 6%, despite of the production over 2million units (1980).
The truck industry was basically the same. From the ‘50s the production started to grow, and it was rising until the end of the ‘80s.
The car and truck manufacturing was just as isolated from the Western European market as the other industries. This situation is shown by for example ,the export rate of the Karosa (before 1989) that was up to four five percents of its business. By the end of the Soviet Empire the situation became even worse. The car manufacturing industry wa unproductive and obsolete and didn’t meet the standards of the Western side of Europe. These reasons and other factors led to the collapse of the CEE automobile industry. The factors were, the...