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Uncommoditizing strategies by emerging market firms

Published on Aug 10, 2018in The Multinational Business Review
· DOI :10.1108/MBR-07-2017-0051
Alvaro Cuervo-Cazurra32
Estimated H-index: 32
(NU: Northeastern University),
Jorge Carneiro (FGV: Fundação Getúlio Vargas)+ 6 AuthorsWilliam Newburry20
Estimated H-index: 20
(FIU: Florida International University)
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Abstract
Purpose 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. Design/methodology/approach 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. Findings 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. Originality/value 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.
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Published on Nov 1, 2017in Journal of World Business 5.79
Alvaro Cuervo-Cazurra32
Estimated H-index: 32
(NU: Northeastern University),
Huaichuan Rui6
Estimated H-index: 6
(RHUL: Royal Holloway, University of London)
We identify how barriers to absorptive capacity limit success in integrating external technology by firms in emerging markets. We refine previous barriers to absorptive capacity and classify them into internal (managerial biases and weak social integration mechanisms) and external (muted activation triggers, conflicting source relationships, and feeble appropriability regimes). We also identify how particular conditions in emerging markets (higher restraints on incentives, higher information asy...
Published on Jun 1, 2017in Journal of World Business 5.79
Diego Finchelstein1
Estimated H-index: 1
(University of San Andrés)
Abstract I examine how different State actions shape the internationalization process of large firms in Argentina, Brazil and Chile. I argue that direct actions produce a more diversified internationalization by sector and a faster internationalization pace. The expansion of large firms abroad occurs through a narrower set of activities when indirect actions prevail. Indirect State actions encourage limited geographical extension and a gradual internationalization pace, producing fewer global le...
Published on Jun 1, 2017in Journal of World Business 5.79
Ruth V. Aguilera34
Estimated H-index: 34
(Ramon Llull University),
Luciano Ciravegna13
Estimated H-index: 13
(INCAE Business School)
+ 1 AuthorsMaria Alejandra Gonzalez-Perez7
Estimated H-index: 7
(EAFIT University)
Abstract Latin America is an under-researched region that has the potential to yield new and important insights on the internationalization of firms from emerging markets, particularly as compared with the experience of firms from other regions. At the same time, some of the unique features of Latin America are generating new ideas that contribute to a better understanding of how the home country influences the behavior of firms in general and their foreign expansion in particular. In this artic...
Published on Feb 1, 2017in Global Strategy Journal 2.73
Stephanie Lu Wang9
Estimated H-index: 9
(IU: Indiana University Bloomington),
Alvaro Cuervo-Cazurra32
Estimated H-index: 32
(NU: Northeastern University)
Research Summary In underdeveloped countries like those in Sub-Saharan Africa, firms suffer from human capital voids (i.e., a prevalence of very low levels of skills among individuals). These human capital voids have a negative effect on performance improvement. However, managers can solve this negative effect by choosing organizational upgrading mechanisms that are contextually appropriate. In particular, operating joint ventures with foreign partners compensate for this negative effect, wherea...
Published on Sep 19, 2016in The Multinational Business Review
Rajneesh Narula37
Estimated H-index: 37
,
Tiju Prasad Kodiyat1
Estimated H-index: 1
Purpose This paper aims to discuss the opportunities and limitations that the location-specific advantages of the home country represent for infant multinational enterprises (MNEs). The systemic weaknesses of the home country can constrain the long-term competitiveness of its firms and, ultimately, the competitiveness of its MNEs. Many emerging countries have a constrained set of location-specific (L) assets from which their firms are able to develop ownership-specific assets. Design/methodology...
Published on Sep 1, 2016in Journal of World Business 5.79
Huaichuan Rui6
Estimated H-index: 6
(RHUL: Royal Holloway, University of London),
Alvaro Cuervo-Cazurra32
Estimated H-index: 32
(NU: Northeastern University),
C. Annique Un13
Estimated H-index: 13
(NU: Northeastern University)
We analyze learning-by-doing and how emerging market multinationals use it to upgrade their capabilities. Building on an in-depth case study, we present two novel arguments. First, we clarify the concept of learning-by-doing by identifying four distinct processes in which learning-by-doing occurs: Integration, whereby the firm incorporates external knowledge and coordinates multiple sources of knowledge to undertake an activity; trial and error, whereby the firm attempts a new activity until it ...
Published on Jan 1, 2016in Journal of International Business Studies 7.72
Klaus E. Meyer41
Estimated H-index: 41
(China Europe International Business School),
Mike W. Peng60
Estimated H-index: 60
(UTD: University of Texas at Dallas)
In “Probing Theoretically into Central and Eastern Europe: Transactions, Resources, and Institutions,” we outlined the contributions of research in Central and Eastern Europe (CEE) to theoretical debates in business research. In this retrospective, we reflect upon the evolution of the field over the past decade. With the fading impact of CEE’s distinct shared history, we suggest that CEE best be analyzed as emerging economies, rather than as a distinct geographic entity. Emerging economy busines...
Published on Nov 16, 2015in The Multinational Business Review
Victor Zitian Chen7
Estimated H-index: 7
(UNCC: University of North Carolina at Charlotte),
Jing Li19
Estimated H-index: 19
(SFU: Simon Fraser University),
Daniel Shapiro28
Estimated H-index: 28
(SFU: Simon Fraser University)
Purpose – The purpose of this study is to extend the classic country-specific advantage (CSA) – firm-specific advantage (FSA) framework by integrating an institution-based view of CSAs into the discussion of FSAs. In his classic CSA-FSA framework, Rugman suggests that successful multi-national enterprises (MNEs) are often built on the interaction between strong FSAs and strong CSAs at home. In the case of emerging market multi-nationals (EMNEs), he argued that strong CSAs were of particular impo...
Published on Nov 12, 2015in The Multinational Business Review
Victor Zitian Chen7
Estimated H-index: 7
,
Jing Li19
Estimated H-index: 19
,
Daniel Shapiro28
Estimated H-index: 28
Purpose – The purpose of this study is to extend the classic country-specific advantage (CSA) – firm-specific advantage (FSA) framework by integrating an institution-based view of CSAs into the discussion of FSAs. In his classic CSA – FSA framework, Rugman suggests that successful multi-national enterprises (MNEs) are often built on the interaction between strong FSAs and strong CSAs at home. In the case of emerging market multi-nationals (EMNEs), he argued that strong CSAs were of particular im...
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