Overcoming Challenges of New Ventures in Emerging Markets - The Ebay-baazee.com Transaction: What are the Challenges and How Did They Overcome them?

Abstract

While the real GDP growth rate of the US is expected to slow from 3.6% in 2005 to 2.9% in both 2006 and 2007, the economic boom is set to continue in emerging markets like India where real GDP is forecast to expand by 7.6% in 2005 and 2006. Needless to say, there exists a strong case to pursue opportunities in these markets. However, as foreign entrepreneurs and investors based outside of these emerging markets look to participate in the rapid expansion, they are faced with the challenging task of pursuing entrepreneurial investments in an unfamiliar environment. The entrepreneur and investor now have the additional complexity of ensuring business models are successfully executed in a completely new context. In this paper we discuss why these two factors are important for an entrepreneurial venture and through the Bazee.com transaction illustrate some strategies to manage these issues.

Keywords: Emerging Markets, India, M&A

JEL Classification: M13