Global Expansion Strategies for Multinationals from Emerging Markets

Abstract

This chapter examines how emerging-market multinational companies (EMNCs) should go about successfully operating in other emerging and developed markets so they, too, can become global players. The infrastructure, regulatory, socio-economic, socio-political, technological, and cultural systems in emerging markets are drastically different. The authors assert that their business and marketing strategies have been and should be different from those of the traditional conglomerates of the world in order to succeed. Differential advantages of EMNCs include flanking advantage, diaspora advantage, customer advantage, cost advantage, home turf advantage, and the geopolitical advantage. Resource scarcity will drive major technology breakthroughs, such as cloning and nanotechnologies, where key drivers of innovation will be affordability and accessibility of products, technologies, and services. EMNC dominance will be most apparent in sectors where operand resources are dominant. Over time, EMNCs will challenge global leadership sectors where both operand and operant resources are critical. In these sectors, we may see global leadership shared between MNCs and EMNCs. The last frontier will be sectors where primarily operant resources are sufficient.