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This paper aims to analyze how emerging market firms upgrade their capabilities by focusing on “uncommoditizing strategies” that enable them to achieve levels of…
This paper aims to analyze how emerging market firms upgrade their capabilities by focusing on “uncommoditizing strategies” that enable them to achieve levels of international competitiveness beyond the comparative advantages of their home countries and serve markets with premium pricing, quality and reputation of products.
In this paper, the authors studied 18 Latin American companies across six countries. Latin America represents an ideal setting because many of these countries have traditionally developed using natural resource endowments, and their firms have tended to rely on these in their internationalization. To facilitate the analysis of each case and the comparisons across cases, the authors used the same analytical framework for the companies, identifying the sources of differentiation and cost efficiency strategies that enabled these firms to upgrade their capabilities and compete on the basis of premium pricing, quality and reputation.
The analysis identified a general framework that represents an abstraction of the actions taken by these companies over time. The proposed model consists of three main elements used to pursue uncommoditizing strategies: tropicalized innovation, global efficiency and coordinated control.
Recent research on emerging market firms has shown interest in how these firms upgrade their capabilities. This paper contributes to this stream of research by providing an overarching framework that not only bridged previous narrower studies but also explained how firms can develop uncommoditizing strategies to upgrade their capabilities. Further, this paper helps managers by providing a comprehensive yet succinct overview of the main strategies that they can use to help their firms to achieve international competitiveness.
This paper questions currently accepted arguments about the impacts of pro-market reforms in the internalization of emerging country firms, through an in-depth analysis of…
This paper questions currently accepted arguments about the impacts of pro-market reforms in the internalization of emerging country firms, through an in-depth analysis of the Brazilian case, thus revealing new dimensions to add to the extant literature.
Historical analysis is the central mode of investigation leading to a commitment of offering historically grounded explanation for pro-market reform impacts in the Brazilian industry.
Outcomes reveal that the impacts of pro-market reforms depend on (a) the purpose of their adoption, (b) the compatibility with the features of the local institutional context, and (c) the relative bargaining power of local firms vis-à-vis foreign multinationals.
The research is based on the Brazilian experience only which is indicative of what may have happened in other Latin American countries; however, the analytical approach may be extended to the study of other emerging countries.
Practical and social implications
By having a systemic perspective encompassing the different actors and the interdependence among themselves, it allows for an enhanced view of the factors which led to the adoption of pro-market reforms and the forces which acted for its configuration, thus helping policy-makers to better approach industrial policy-making.
A longitudinal perspective within a historical analysis is adopted, focusing on the interplay of macro-level and firm-level factors, resulting in a better understanding of the reasons which led to the adoption of pro-market reforms, the resistance to its implementation and its real outcomes.
Despite the seminal works of authors like Bartlett, Ghoshal, Nohria, Doz, Williamson, among others, because they focused on mature multinationals, newcomers in…
Despite the seminal works of authors like Bartlett, Ghoshal, Nohria, Doz, Williamson, among others, because they focused on mature multinationals, newcomers in international markets find scarce information about the design and implementation of international operations networks. In this paper we analyze the internationalization process of Brazilian and Chinese firms to understand the evolution of their networks, a process influenced by factors inexistent in studies about developed country multinationals, namely global production networks (GPNs) and country-of-origin effects. The key characteristics of their international operations networks seem to be well described by a stage-based approach where emerging country multinationals start as local optimizers and then evolve by taking different strategic positions within the GPN to which they are connected. That upgrading is possible when the implementation of the international operations network reaches a certain level of maturity.
Despite the extremely diversified cultural context in which Brazilian enterprises operate, the issue of cultural diversity is new in their agenda. The emergence of this…
Despite the extremely diversified cultural context in which Brazilian enterprises operate, the issue of cultural diversity is new in their agenda. The emergence of this theme is much more related to the need of creating competitive advantages by developing diversified competences, usually following policies which are established by the headquarters of local subsidiaries, than attending to legal procedures, as happens in the USA and Canada. Departing from a conceptual elaboration about cultural diversity and its management, this paper presents the results achieved in a research among leading Brazilian firms. The points that emerge as conclusions can be generalized for other countries.
The purpose of this paper is to discover whether factors responsible for the existence of non‐local competences in emerging multinationals are different from those of…
The purpose of this paper is to discover whether factors responsible for the existence of non‐local competences in emerging multinationals are different from those of traditional multinationals.
Survey of 66 subsidiaries of Brazilian multinationals (BrMNes). This represents 70 percent of the 93 subsidiaries originally sampled.
The factors responsible for the development of non‐local competences in BrMNes are: the relationship between subsidiaries and business networks, the initiatives of subsidiaries and the support of the entrepreneurial orientation of subsidiaries by the headquarters.
Even though emerging multinationals require more resources developed abroad and although some studies revealed that different management models had been adopted during the internationalization process, the factors required to develop non‐local competences in BrMNes are very similar to those required by traditional multinationals.
Subsidiary innovation in partnership with the business network in the foreign country is essential to develop non‐local competences.
The paper supports the results of studies of traditional multinationals and demonstrates that despite the differences of Brazilian multinationals the factors required to develop non‐local competences are very similar. This is an interesting result to consolidate knowledge about global competitive advantages in multinationals: the management model to develop non‐local competences seems to be the same, in order of importance, regardless of multinational origin.
The purpose of this paper is to re-assess both the nature and sources of the competitive advantages which multinationals expanding from home bases in emerging economies…
The purpose of this paper is to re-assess both the nature and sources of the competitive advantages which multinationals expanding from home bases in emerging economies (EMNEs) may enjoy in the global market.
The paper analyses the results of 12 concurrent studies undertaken by a group of experts who were asked to examine how strategies for innovation, international value chain configuration and foreign mergers and acquisitions contributed to the competitive advantages of multinationals emerging from Brazil, Russia, India and China (the BRICs), respectively.
EMNEs do have competitive advantages that can underpin their expansion abroad, but these are mainly “non-traditional” advantages that have been built by finding innovative ways to leverage advantages of their home countries. EMNE’s internationalisation is as much about accessing new resources and knowledge to enable them to extend their competitive advantage, as it is a route to exploiting existing advantages over a larger set of markets. As a result, the global value chain structure of EMNEs tends to be fundamentally different from that chosen by incumbent multinationals.
The study is limited to EMNEs from the BRIC countries, but implications for EMNEs emerging from other countries are discussed.
We bring to bear extensive data and a systematic approach to understanding the new breed of multinationals emerging from the BRIC countries; their sources of competitive advantage; and how they are using innovation, foreign investment and overseas acquisitions to transform global competition.