Auto industry late followers knowledge creation through internationalization

Abstract

Radical changes of business environment have been caused by growing globalization at the beginning of the 21st century. Consequently, a strong network of trade and investment relationships between national economies has been established. Although it entails many risks, global business environment opens up great opportunities, as well. In order to seize these opportunities, many companies from emerging markets internationalize their business operations, and thus challenge once untouchable leaders from developed countries. Traditional theories on multinational companies cannot fully explain their motives for going abroad. Recently, the automotive industry has become a new field where the late followers from emerging markets try to challenge the leaders. This paper includes the following three case studies: Hyundai - Kia, Geely - Volvo, and Tata Motors - Jaguar Land Rover. These case studies show that although the late followers in the automotive industry use different internationalization strategies, they all perceive internationalization as a means of obtaining the lacking competencies and building up a positive reputation.