Resource endowments, market positioning, and competition in transitional economies: Global and local advertising agencies in Hungary

Abstract

Purpose

The purpose of this paper is to draw upon the resource‐based view (RBV) of the firm in order to assess the “who, when, where, and how” questions about use of resources in shaping market positioning by global and local firms in a transitional economy (TE).

Design/methodology/approach

The paper utilizes a longitudinal case‐study approach to present and discuss resource asymmetry between global and local advertising agencies operating in Hungary.

Findings

RBV proves to be valuable theory, revealing an interesting and unexpected range of sources and types of resources that are being used to advantage by local and global agencies competing in Hungary. Earlier historical asymmetries in resource endowments contributed to a notable division between global and local agencies according to market sector. Specific resources, such as reputation, access to global resources, and use of Western‐style business practices, proved beneficial to global firms after Hungarian market liberalization in 1989, while interpersonal relationships have emerged as a valuable resource, regardless of context.

Research limitations/implications

Use of a convenience cross‐sectional sampling method may contribute to some halo effects and personal bias. Additionally, results may be limited in their applicability only to the advertising industry and to Hungary as a specific TE. Future research should validate these findings in other industries and other TEs.

Practical implications

Findings from this study offer marketing managers operating in TEs fresh insights into how asymmetries in resource endowments at various points in an infant industry's life cycle act to influence choice of market positioning strategies and subsequent success of firms competing in the industry.

Originality/value

This paper provides rich detail of the advertising industry in Hungary, suggesting directions for study of advertising industries in other TEs, not only in Eastern Europe. Results from this study increase confidence in the generalizability of RBV theory by demonstrating its usefulness and flexibility when applied to an unusual context in terms of time and space.

Citation

Wilson, R.T. and Amine, L.S. (2009), "Resource endowments, market positioning, and competition in transitional economies: Global and local advertising agencies in Hungary", International Marketing Review, Vol. 26 No. 1, pp. 62-89. https://doi.org/10.1108/02651330910933203