Managerial decision making
There is an increased likelihood of the difference in the required rate of return in the established markets and in the emerging markets. In this case, the rate of return is expected to be higher in an established market than in an emerging market. To ensure that there is a balance between the two kinds of markets, various actions can be taken. One of these actions is reducing the cost. The reduction in cost will lead to an increase in revenues.
Apart from that, the other action that can be taken is ensuring that the business takes the right amount of risk. In this case, it is advisable that one should not take too much risk, as this may lead to losses. A business organization should consider taking calculated risks. Doing so will help in ensuring that the returns on investment is reasonable, if not high. Therefore, taking calculated and well-predicted risk is important in emerging markets as such is usually occasioned with a lot of uncertainties.
In conclusion, taking the two forms of actions will be important in ensuring that there is a fair balance on the rates of return between an emerging and an established market. For instance, the action on cost reduction will maximize revenues, hence maximize the rate of return. On the other hand, the action of taking calculated risks will ensure that the business only invests in ventures that are profitable to it.