Internationalization and capability building in emerging markets: What comes after success?

Abstract

Existing literature on emerging‐market multinational enterprises (EMNEs) often acknowledges their competitive weaknesses, latecomer disadvantages, poor governance structures, technological deficiencies, and dependence on local resources. Despite these structural disadvantages, some EMNEs have succeeded in becoming global and regional leaders in their respective industries. Many studies explore how EMNEs are internationalizing. However, the discussion of what to expect from a successful overseas expansion remains very limited, especially when considering fast‐changing industries in unpredictable markets. The purpose of this paper is to analyze how and why an EMNE competing in a changing industry in turbulent geographies builds capabilities to remain competitive locally and internationally. Using a qualitative case study approach, we identify the company's responses to reconfiguration forces related to the entry of new competitors, difficulties in protecting knowledge, technological change, and sophistication. Our study highlights re‐invention, re‐pioneering, and re‐signaling as new capabilities that emerge as a result of adapting to a fast‐changing industry in unpredictable environments.