Doing Business in Newly Privatized Markets: Global Opportunities and Challenges

Doing Business in Newly Privatized Markets: Global Opportunities and Challenges

Doing Business in Newly Privatized Markets: Global Opportunities and Challenges

Doing Business in Newly Privatized Markets: Global Opportunities and Challenges

Synopsis

International marketing consultant Russell Miller takes a close, pragmatic look at the movement to privatization that is sweeping the important markets of Western and Central Europe, Latin America, and Asia, and lays out the business opportunities and challenges that U.S. corporations and others worldwide will find there. He identifies the market dynamics created by newly privatized companies, the problems of reaching them, and the approach strategies that U.S. and other companies would find most productive. An important insight into how corporations here and abroad can gain access to these rich new markets, the book will be essential reading for top management and specialists in marketing, strategic planning, and international business development.

Excerpt

The transfer of state-held assets into private hands, now commonly referred to as privatization, is a relatively new economic concept. Because this process offers substantial benefits to divesting governments, as well as the new owners and the general citizenry of a country, it is acquiring increased acceptance throughout the world. As a result, the privatization phenomenon is producing thousands of new, privately held companies in over 100 different countries in both the industrialized and developing worlds. These companies, with their unique operating cultures and characteristics, constitute a formidable market force in the expanding global economy.

The transition from long-term state control to newly formed private governance, however, is a complex and sometimes confusing process. The manner in which the enterprise makes this operational transformation will often determine its ultimate viability and establish the firm's capacity to function as a valued customer or as an effective strategic partner for an American company.

Depending on definition, the privatization of state-held assets is traceable to countries in Asia that began to privatize some of their state-owned businesses in the 1960s. Later, in the mid-1970s, the military government of Chile attempted to divest several of the country's larger loss-producing enterprises by offering them for sale to private investors.

The early attempts at privatization were not particularly successful. However, the efforts did provide a counterbalance to the prevailing trend of nationalization that was in economic vogue during the years following World War II. In Great Britain during the 1940s, for example, over 20 percent of the country's workforce was employed by nationalized industries. These and other large European organizations at that time were responsible for creating thousands of new jobs and were instrumental in the rebuilding of the war-ravaged infrastructure.

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