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Uncommoditizing strategies by emerging market firms

Published on Jul 15, 2019in The Multinational Business Review
· DOI :10.1108/MBR-07-2017-0051
Alvaro Cuervo-Cazurra33
Estimated H-index: 33
,
Jorge Carneiro9
Estimated H-index: 9
+ 6 AuthorsWilliam Newburry22
Estimated H-index: 22
Sources
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.
  • References (47)
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References47
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#1Alvaro Cuervo-Cazurra (NU: Northeastern University)H-Index: 33
#2Huaichuan Rui (RHUL: Royal Holloway, University of London)H-Index: 7
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...
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#1Diego Finchelstein (University of San Andrés)H-Index: 1
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...
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#2Luciano Ciravegna (INCAE Business School)H-Index: 13
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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...
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#1Stephanie Lu Wang (IU: Indiana University Bloomington)H-Index: 9
#2Alvaro Cuervo-Cazurra (NU: Northeastern University)H-Index: 33
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...
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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 ...
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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...
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#1Victor Zitian Chen (UNCC: University of North Carolina at Charlotte)H-Index: 9
#2Jing Li (SFU: Simon Fraser University)H-Index: 20
Last. Daniel Shapiro (SFU: Simon Fraser University)H-Index: 29
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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...
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#1Victor Zitian ChenH-Index: 9
#2Jing LiH-Index: 20
Last. Daniel ShapiroH-Index: 29
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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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This paper aims to synthesize, analyze and categorize the empirical literature on country-specific factors that affect foreign direct investment (FDI) inflows to the Middle East and North Africa (MENA) region. Identifying gaps and methodological challenges in the reviewed articles, recommendations are made to guide future research.,Applying the systematic review methodology, content analysis is conducted of 42 relevant empirical studies that explore country-specific FDI determinants in the MENA ...
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