Winning in Emerging Markets through Strategic Innovation: Competitive Advantage Transferring and Rebuilding

摘要

In this paper, resource based-theory and institutional theory are firstly applied to explain the success of multinational companies (MNCs) in their home countries and why their competitive advantages are increasingly local. The paper then argues that when MNCs enter emerging markets, their competitive advantages are often weakened due to the internal constrains such as nontransferable competitive assets and external constrains such as different institutional environments of emerging markets. MNCs often rarely have easy access to the local resources needed to compete with local firms in emerging markets. As a result MNCs based in developed economies must adapt their competitive assets to fit the institutional context and industry characteristics of emerging markets in order to compete with local firms. By analyzing the operations of some MNCs in China, the paper argues that, to succeed in emerging markets, MNCs not only need to transfer their competitive advantages by transferring competitive assets in their internationalisation but also need to develop new capabilities and access to critical resources, such as knowledge-based resources, to rebuild their competitive advantages. MNCs need identify their competitive recourses, knowing that which competitive resources are transferable and which are not. To those transferable competitive resources, MNCs need examine if they can be directly transferred, or need to be localized or reshaped after the transfer and if the competitive resources can still be "competitive" in the emerging market after they are transferred. MNCs can succeed in the emerging markets through strategic innovation, such as developing a network-oriented model, to overcome the internal and external constraints and to rebuild their competitive advantages.