Emerging market multinational companies’ evolutionary paths to building a competitive advantage from emerging markets to developed countries

One significant emerging phenomenon of global competition is the increasing number of Emerging Market Multinational Companies (EMNCs) that have survived and succeeded in the constraining institutional environments in their home turfs and are now participating in the global marketplace. However, despite the growing literature, our understanding of the factors that influence EMNCs’ competitive advantage is limited. We conduct a historical longitudinal analysis of sixteen companies originating from key emerging markets viz. India and China. Our findings suggest that EMNCs’ evolutionary paths to building competitive advantage from their home market to the developed countries is, on one-hand, based on the EMNCs’ ability to acquire resources and absorb them to build their own advantage. On the other hand, it is also based on EMNCs’ ability to find new market niches and to enhance their innovation capabilities to overcome the liability of emergingness.     

Does it pay for firms in Asia's emerging markets to be market oriented? Evidence from Vietnam

The positive effects of market orientation (MO) on firm performance are empirically supported much more strongly by studies conducted in developed than in emerging markets. One commonly cited reason for this differential effect is that MO is affected by the cultural, economic and institutional characteristics of the economies in which it is applied. This study aims to determine whether or not MO is relevant in an Asian emerging market such as Vietnam and if so, how a firm in such countries can become more market oriented. Based on a survey of 300 firms and using structural equation modeling, the present study finds that MO has a significant effect on firm performance and that its adoption is driven by both internal organizational and external market forces. The study identifies these specific internal and external forces, including those that are unique to the emerging economies in Asia.     

From uncertainty to risk—A risk management framework for market entry

This paper contributes to entry mode theories by proposing to integrate the distinction between uncertainty and manageable risk (Knight, 1921). Acknowledging firms’ ability to diversify, transfer and mitigate certain sources of risk provides an additional layer of analysis, improves empirical modelling and managerial practicability of entry mode research. We provide a framework of instruments including capital structure, contractual and network-based risk management. We illustrate the theoretical and empirical value of our framework using a large sample of project financed infrastructure investments. Finally, we position project finance as a risk-motivated, cooperative market entry mode complementing existing categorizations.     

Country and industry factors in returns: evidence from emerging markets’ stocks

This study examines the influence of country and industry factors on the cross-sectional variance and correlation structure of returns. I use new data on emerging markets’ stocks obtained from the Emerging Markets Data Base. I find that emerging markets’ returns are mainly driven by country factors, as it was shown previously in studies for mature markets, and that cross-market correlation is not affected by the industrial composition of the indices. These results have important implications in regard to international portfolio diversification: cross-market diversification seems to be a better bet than cross-industry diversification. A finer industry partition shows, however, that ignoring the industrial mix leads to an important loss of diversification benefits.     

Host country’s environmental uncertainty,technological capability,and foreign market entry mode: Evidence from high-end equipment manufacturing MNEs in emerging markets

The paper investigates the impact of the host country’s environmental uncertainty on the choice of entry mode and also discusses the moderating role of technological heterogeneity in this relationship. Based on the resource-based view and institutional theory framework, we first analyze the investment motivation of emerging industries in emerging markets and evaluate the environmental uncertainty from two dimensions, including the institutional environment (country level) and industry environment (market level). Then, the theoretical predictions are empirically tested using 173 overseas investment events in China’s high-end equipment sector from 2010-2018. Our findings suggest that when the uncertainty of the industry environment is low, no matter how uncertain is the institutional environment, most firms tend to choose a cooperative strategy. Once the industry environment indicators become turbulent, a high degree of institutional environment uncertainty causes firms to evade trade barriers by choosing a new plant. Alternatively, choosing a relatively conservative mode, such as export. Meanwhile, technological capability weakens the influence of environmental uncertainty on entry mode.     

What do consumers want? A methodological framework to identify determinant product attributes from consumers’ online questions

Determinant attributes play an important role in consumers’ purchase decisions. Firms rely on them to differentiate their products. Determinant attributes are typically identified using direct methods or indirect methods. However, the voice of the customer online can also provide key insights regarding attributes that are part of the consumers’ pre-purchase search process. The purpose of this study is to propose a framework to identify determinant attributes from online consumer questions. Our method uses semi-supervised Latent Dirichlet Allocation to identify product attributes initially. This is followed by the application of sequence pattern mining to identify temporal sequences of determinant attributes. Finally, hierarchical time series is used to forecast consumer interest in determinant attributes over time. The results show that our study can be used to identify determinant attributes of competing brands and can also be used to forecast consumer interest in these attributes. Brands can use this framework to have a pulse on what consumers look for before purchase. This will aid their decisions related to promotion as well as product development processes.     

‘Fit for purpose’ contractual relations: determining a theoretical framework for construction projects

Contractual relations encompass the contractual terms within a governing relationship; typically this comprises: the relationship, the risk apportionment, the division of responsibilities and the reimbursement mechanism. In the Western construction industry these have traditionally surrounded arms-length/adversarial discrete contracts. Recent moves to foster collaboration have confused the ‘end’ with the ‘means’ and thus will not maximize the business objectives. This article considers a range of ‘fit-for-purpose’ contractual relations which, when appropriate, can be linked with positive measures to foster collaboration. Consequently this effects the risks and responsibilities prescribed in the contract which, when appropriately aligned, will ensure business success.     

Attributes influencing clothing store choice for an emerging market’s Generation Y Twixter customers

The aim of this paper was to determine the key attributes influencing a sub-segment of Generation Y, the Twixters’ choice of clothing retailers in South Africa, an emerging market. Generation Y has been identified as an important segment particularly for apparel and the Twixter sub-group comprises a third of the segment. Using a positioning theory lens, retailers need to understand the attributes a target market finds important as stores are positioned in consumers’ minds on those attributes. The study therefore sought to determine what these Twixters consider to be important attributes in their clothing store selection. The study comprised two stages; a qualitative stage based on focus group discussion data in which the attributes were determined, discussed and defined, and a quantitative stage, which involved a survey administered to 368 Twixter respondents which determined the relative importance of the attributes to Twixters in their clothing store selection. The results reveal that these Twixters appreciate the price–quality relationship and prefer clothing stores which provide high quality, unique and fashionable merchandise that meets their value for money requirements. The results of the study, although not generalisable, provide noteworthy insight for clothing store and apparel marketers targeting these Generation Y customers.     

Multinational enterprises’ risk mitigation strategies in emerging markets: A political coalition perspective

This paper contributes to the IB literature by investigating MNEs’ risk mitigation strategies in emerging markets. Drawing on institutional perspectives and March’s theoretical concept of forming a ‘political coalition’, we propose that risk mitigation cannot be limited to passive compliance and/or demonstrating good corporate behavior, but should extend to collective efforts by building a political coalition and working with key stakeholders to manage potential risk and obtain favorable outcomes in complex institutional environments. In considering MNEs in contemporary China and India, we offer different types of risk mitigation strategies under various institutional contexts and a framework for future research.     

Determinants of reverse marketing knowledge transfer potential from emerging market subsidiaries to multinational enterprises’ headquarters

Emerging markets (EM) are becoming increasingly important for multinational enterprises because of their high growth potential and future prospects. The unique circumstances in EM lead to increased pressure to offer creative marketing solutions that can be leveraged across the multinational network. Setting up subsidiaries to tap into these markets offers companies the opportunity to integrate in the local community and access its knowledge-base for local and global innovations. Literature, however, reveals that EM subsidiaries have been largely ignored concerning their potential for reverse knowledge transfer (RKT), and marketing initiatives are expected to be developed in mature, developed markets. Our paper fills this gap in research and contributes to extant literature by identifying factors at unit, relationship and knowledge levels influencing RKT potential specific to marketing knowledge from EM subsidiaries. The conceptual discussion leads to study propositions and conceptual framework.     

Linking different types of product elimination decisions to their performance outcome: ‘Project dropstrat’

The purpose of the study presented in this paper was to identify different types of product elimination decisions and to determine their relationship to the performance outcome that they achieved. The underlying hypothesis was that there is a linkage between a type of product elimination and the outcome that it achieves. This exploratory proposition was assessed against data pertaining to 156 recently discontinued products provided by an equal number of British manufacturing companies.Eight different types of product elimination decisions and four independent dimensions of the performance outcome of a product elimination decision were uncovered in our research and our findings clearly indicated that different types of product eliminations are indeed closely tied to the outcome results that they achieve. Specifically, the product elimination decisions which were the result of a proactive search for elimination candidates guided by strategic considerations were more successful than those which were the result of a passive response to a problem or crisis situation.     

A guide to pay-what-you-wish pricing from the consumer’s viewpoint

As customer participation in business transactions increases, it is important to investigate how consumers approach financial transactions with firms in terms of selfishness and fairness. Pay-what-you-wish pricing models continue to attract managerial and academic interest as allowing customers to set prices provides an unorthodox setting in which to examine forces that drive buyer-seller interactions. This Executive Digest provides an overview of the current state of pay-what-you-wish (PWYW) pricing and the benefits it can provide to a firm.     

From local to global innovation: The role of subsidiaries’ external relational embeddedness in an emerging market

This study examines factors that influence the development and transformation of local innovations into global innovations from an emerging market subsidiary. We argue that subsidiaries’ relational embeddedness with the external local network is essential for the development of local innovations. Turning local innovations into global ones is the result of the level of innovativeness evoked by the subsidiary located in an emerging market. However, the transformation of local into global innovations is more likely to happen in the case of subsidiaries having previous reverse knowledge transfers in functional areas. Reverse knowledge transfers indicate internal embeddedness, which is essential for local innovation to be transformed into global innovation. We draw on survey evidence from 131 foreign subsidiaries operating in Brazil. Using a Structural Equation Modeling technique, our results support our hypotheses and show that subsidiaries’ relational embeddedness with the external local network is positively associated with local innovation, which is transformed into global innovation, especially when innovation is developed in the subsidiary´s functional areas with previous reverse knowledge transfers. We draw implications for the field of subsidiary management research, specifically to understand the role of local innovation from foreign subsidiaries in emerging markets.     

The role of social commerce for enhancing consumers’ involvement in the cross-border product: Evidence from SEM and ANN based on MOA framework

Although cross-border e-commerce (CBEC) has experienced rapid development, severe issues remain, including information asymmetry and uncertainty. Social commerce platforms have emerged to provide consumers with new approaches to solving these issues and enabling shopping decisions. However, there is still a dearth of knowledge about the underlying mechanism that explains why and how CBEC consumers employ social commerce platforms to facilitate information processing. To address this critical issue, we employed SEM and ANN analytical approaches to examine the research model developed from the motivation-opportunity-ability (MOA) framework. The results revealed associations between the identified motivational factors (information seeking, serendipity, relaxation, and symbolic motivation), opportunity factors (time availability, platform empowerment, and electronic Word-of-Mouth), the ability factor (self-efficacy), involvement, and purchase intentions. In addition, an importance ranking of the most critical drivers of consumers’ shopping decisions was derived from various antecedents.     

Consumers’ response to weak unique selling propositions: Implications for optimal product recommendation strategy

We use a multi-method approach (analytical model and behavioral experiment) to investigate product recommendations based on less-important attributes (weak unique selling proposition, USP). We consider multiple scenarios in which a recommender’s level of expertise (knowledge about product attributes and their importance) and bias (preference for the firm as opposed to consumers) operate as cues for consumers to evaluate the recommender’s message.Results show that optimal messaging behavior is a function of an interactive process involving recommender characteristics and the relative importance of product attributes to consumers. The results identify conditions that determine when weak USPs are likely to increase or decrease a consumer’s propensity to buy the recommended product and when a recommender might optimally communicate weak USPs or avoid sending such a recommendation.     

Whether to offer return-freight insurance or open a physical showroom: A strategic analysis of an online retailer’s decisions

Return-freight insurance (RI) and physical showroom (PS) can be a double-edged sword for retailers, as they can help consumers reduce product mismatch and information uncertainty but may lead to higher return rates and operating and construction costs. In this study, we examine four corresponding configurations regarding whether to provide RI (yes-R, no-N) and whether to open a PS (yes-S, no-N): NN, RN, NS, and RS. First, we find that offering RI or opening a PS does not necessarily expand market demand. Whether demand grows is closely related to the RI premium. When the RI premium is low, the RN strategy, which offers only RI, can expand the market, and the NS and RS strategies, where retailers open a PS, can shrink the market. In addition, retailers offering RI charge a higher sales price, while those opening a PS adopt a price reduction strategy. Second, the optimal strategy configuration for retailers depends on four factors: the RI premium, the proportion of consumers, the retailer’s cost of handling returns and the PS construction cost. Retailers consider opening a PS only when both the proportion of high-cost consumers and the PS construction cost are low. An interesting result is that when the RI premium is higher, offering RI still benefits the retailer. Third, we present an intuitive decision support matrix to help retailers recommend the optimal strategy configuration, using the RI premium as a proxy for the product online return rate and the proportion of high-cost consumers as a proxy for the degree of product standardization. Depending on whether products with high (low) return rates are highly personalized or standardized, retailers decide whether to use an NS (RS) or NN (RN) strategy.     

Market entry into new export markets: When are firms more likely to imitate their competitors’ market presence?

We investigate the extent to which competitors’ presence in a given export market has an impact on a firm's decision to enter such a market and, more precisely, under what conditions imitation is more likely to take place. We show that firms with greater export knowledge are more likely to enter those countries where their competitors are already present. Furthermore, experiential knowledge seems necessary to absorb valuable information provided by the presence of competitors in those markets. Thus, imitation should not be regarded as the option best suited for firms with reduced expertize that follow blindly their competitors into new markets. Through a panel analysis of Brazilian exporters during the 2001–11 period, our study contributes to research on market entry decisions, especially stressing the critical role of prior relevant knowledge in facilitating imitation among players.     

Stock Market’s Reaction to Disclosure of Environmental Violations: Evidence from China

The stock market’s reaction to information disclosure of environmental violation events (EVEs) is investigated multi-dimensionally for Chinese listed companies, including variables such as pollution types, information disclosure sources, information disclosure levels, modernization levels of the region where the company locates, ultimate ownership of the company, and ownership held by the largest shareholder. Using the method of event study, daily abnormal return (AR) and accumulative abnormal return (CAR) are calculated under different event window for examining the extent to which the stock market responds to the EVEs. Furthermore, statistical significance of the difference in stock market reaction is compared between event firms with different characteristics. The relationship between CAR and its impact factors is examined by multivariate analysis. The findings reveal that the average reduction in market value is estimated to be much lower than the estimated changes in market value for similar events in other countries, demonstrating that the negative environmental events of Chinese listed companies currently have weak impact on the stock market.     

Partnerships that go places: How to successfully market products from vendor partners at retail stores from the vendors’ perspective

This study constructed a model using multiple attribute decision making (MADM) to evaluate the successful marketing of products from vendor partners at an on-campus training store. We used the 5Ps of marketing (people, product, price, promotion, and place) as the research framework and applied the fuzzy analytic hierarchy process (FAHP) to calculate the weight of each evaluation criterion. A gap analysis was performed on each evaluation criterion, using the modified VlseKriterijumska Optimizcija I Kaompromisno Resenje (modified VIKOR) to identify the important factors that students at an on-campus training store should prioritize for improvement when formulating marketing strategies from vendor partners. The results indicatae that when collaborating with the on-campus training store, vendor partners placed the greatest emphasis on promotion and the least on people. The results indicatae that when collaborating with the on-campus training store, vendor partners placed the greatest emphasis on promotion and the least on people. The evaluation dimensions were ranked according to their weights in descending order as follows: promotion(0.279), product(0.239), price(0.179), place(0.157), and people(0.143). Based on the overall weights of all evaluation criteria featured in present study, vendor partners placed the top five greatest emphasis on product quality and safety assurance(0.088), social media marketing(0.078), price promotion activities(0.071), product uniqueness(0.069), as well as brand advertising and promotion(0.066). The current research provides practical and appropriate strategies for planning successfully product marketing strategies from vendor partners, and further helping vendor partners increase product exposure and attract consumers to purchase their products at the on-campus training store. The findings may help vendor partners increase and improve product exposure and attract consumers to purchase their products.