session 7 Flashcards
Strategies that fit emerging markets. Harvard Business Review
Emerging economies define
Challenges for western companies in Emerging Economies
Typology of institutional voids
How can western companies deal with these voids?
How do the locals deal with these voids
Market segments in Emerging Markets
o Low income, rapid growth
o Policies of economic liberalization
o Generally production based economy
o Rising income, growing middle class
o Poor distribution system
o Poor communication/logistic infrastructure
o Lack of intermediaries
o Lack of regulatory enforcement
o Tendency for business regulations to change rapidly
o Counterfeiting of IP
o Opaque power/loyalty structures
- Product Markets
- Labor markets
- Capital markets
- Macro context
- Enter/Wait/Leave
- Change the context
- Adapt business model to country
- Form local partnerships
- Family ties
- Business groups
- Government links
- Global
- Glocal (cheaper prices, global quality)
- Local
- Bottom
Santos, J.F.P. and Williamson, P.J. 2015. The new mission for multinationals.
premise:
what is the new mission
from adapt locally -> integrate locally
• Customer Engagement
o From tailoring, to “their brand”
• Supplier interaction
o From adapting to long-term knowledge sharing
• Talent Pool development
o From adapting job titles to long-term knowledge sharing
• Regulatory and institutional development
o From following rules to influencing them
• Societal development
o From CSR to shared destiny
Awate, Larsen, & Mudambi. (2012) EMNE catch-up strategies in the wind turbine industry: Is there a trade-off between output and innovation capabilities?
Differences in internationalizing by companies from emerging companies
Smile curve
o Main findings
• Low labor cost usually source
• Start with relative disadvantage
o Internationalization is a way to escape this
o Trying to asset seek / learn
Output capabilities -> observable products, easier to imitate
Innovation capabilities -> technology skills for next gen, deeper knowledge
Ambidextrous organizations -> ability to have strong output and innovation capabilities (so not emerging boys)
o MNE’s have less breadth and depth of knowledge
o EMNE output catchup earlier
