Emerging market firms: measuring their success with strategic positioning maps

Abstract

Purpose

The purpose of this paper is to understand and map the global competitiveness of firms in emerging markets. The authors refine a framework (called the “strategic control map”, or SCM) that looks at market capitalization – using two parameters of book equity (size) and price to book ratio (performance) – as a key driver of the competitiveness of firms. However, the SCM has limited value in the context of smaller and largely domestic firms, as is the case in emerging markets. To develop a more comprehensive understanding, additional vital metrics such as the degree of internationalization need to be considered.

Design/methodology/approach

The authors compare top 100 Indian firms against global firms on four dimensions – i.e. market price to book ratio, book equity, scope and scale of international operations. The authors consider data for the year 2009-2010 to make comparisons.

Findings

The SCM, formulated with a developed market focus, is not suitable in the context of emerging markets as it fails to consider internationalization as essential to compete at the global level. Accordingly, the authors propose a new conceptual framework, referred to as the “strategic positioning map” (SPM).

Originality/value

In this paper, the authors argue that “international intensity” and “market capitalization” can be two important dimensions to map the relative paths of growth for firms from emerging markets.

Citation

Kumar Singal, A. and Kumar Jain, A. (2014), "Emerging market firms: measuring their success with strategic positioning maps", Journal of Business Strategy, Vol. 35 No. 1, pp. 20-28. https://doi.org/10.1108/JBS-04-2013-0026