The Market of Azerbaijan Republic: A Transition Economy

1580 Words7 Pages
The market of Azerbaijan Republic can be defined as emerging market in transition economy. There is almost no any directly related literature to Azerbaijan market that can be a good source to identify business strategies that must be pursued in this market. But because Azerbaijan market has all main features of other emerging markets, any literature relating to emerging markets or transition economies can be reviewed to provide companies with necessary insight about how can be successful in this market. The term emerging markets is used to define markets of developing countries that grow very rapidly and that are in the process of industrialization. This term covers many countries in large geographic area from Latin America to Asia. These countries are neither fully developed, nor the newly industrialized countries. The main characteristics of these countries are that their economies grow rapidly; they are usually rich with natural resources, GDP rate is very high, people in these countries are able to buy goods and services that they have not been able to buy before. Therefore, these markets offer new customer base and great market opportunities to foreign companies. But it must be noticed that investment usually carry risk and doing business is not easy in emerging markets. Transition economies can be explained as a changing economy from centrally planned to a free market. These economies undergo economic liberalization, where prices set by market forces, macroeconomic stabilization, where high inflation is controlled, privatization of government owned enterprises and creation of a financial sector in order to simplify the movement of private capital (Lakatos G. M. 2008). Especially, existence of private property rights is ... ... middle of paper ... ...ny alternatives to these strategies. The 2007 report of Delaitte’s Manufacturing Industry Group provides firms with very useful insights regarding emerging markets. In this report the importance of special strategy for emerging markets is highly emphasized and it is stated that making minor adjustments to existing products, reducing prices and replicating existing distribution channels is not a good strategy for these markets. In this study researchers take different approach and argue that to achieve sustainable competitive success in emerging markets companies must develop business strategies that based on innovation. Being innovative in emerging markets means to offer unique product or services at a very lower price in order to match the needs and lower buyer power of most emerging market buyers (Delaitte’s Manufacturing Industry Group report, 2007)

More about The Market of Azerbaijan Republic: A Transition Economy

Open Document