International Market Entry Strategies of Emerging Market MNEs: A Case Study of Qatar Telecom

ABSTRACT

Drawing on existing theoretical perspectives and previous research, this study essentially investigated the strategic motives, location choice, and international entry mode strategies of emerging market multinational enterprises based on a case study of a telecom company, Qatar Telecom (Qtel) from the Gulf Cooperation Council. Using empirical findings from the semi-structured interviews, this study has clearly indicated that the main strategic motivation behind Qtel's internationalization was essentially opportunity seeking in terms of enabling market development and generating higher return on investment. Although Qtel used different entry strategies depending on the characteristics of host country markets, the company is more in favor of mergers and acquisitions than greenfield investments.     

Strategic orientation in handicraft subsistence businesses in Oaxaca,Mexico

Abstract

This article, based in the body of strategic orientation literature, identifies and explores the practices of innovativeness, proactiveness and competitive aggressiveness that make up the strategic orientation implemented by subsistence entrepreneurs to improve business performance. A factor analysis was carried out using the data of 101 entrepreneurs, small artisanal business owners who operate in the subsistence markets in Oaxaca, Mexico. The results show that subsistence entrepreneurs notably engage in innovative and proactive practices, and, to a lesser extent, competitive aggressiveness. The research concludes that a combination of innovativeness with proactiveness is the most viable option for improving performance, whereas competitive aggressiveness impedes its development. Even so, however, it is still implemented by subsistence businesses in order to conserve their market share.     

Strategies for Business Format Franchisors to Expand into Global Markets

Abstract

Franchising is emerging as a highly effective strategy for growth, job creation, and economic development and is spreading rapidly around the globe. However, the pursuit of global markets by franchisors has traditionally relied on employing just three generic franchising options (i.e., direct franchising, master franchising, area development). This paper presents a more expansive view of strategic choice for franchisors by presenting first-mover, platform, and conversion strategies as additional strategic approaches that may be utilized to meet the challenge of expanding into international markets. Propositions are advanced to first suggest which strategic approaches aremost appropriate under varied foreign market conditions and then how these approaches should be linked to the three generic licensing options to create combination strategies based on franchisor experience/capabilities and similar/dissimilar markets. A contingency model of global franchising is presented, which depicts the above relationships and provides an overall framework that can assist franchisors in solving the foreign expansion and distribution question. Managerial and research implications are then provided.     

Unleashing the dynamics of product-market ambidexterity in the pursuit of international opportunities: Insights from emerging market firms

Extending the current debate surrounding ambidexterity, this study examines how emerging market firms pursue international opportunities by leveraging the dynamics of strategic ambidexterity in product and market domains. The investigation draws on longitudinal and multiple sources of data from four Chinese multinational firms. Two follow traditional or incremental internationalization pathways, whilst the other two pursue rapid or accelerated internationalization. The study offers a more dynamic perspective to help understand the evolving nature of ambidexterity with respect to the routes of strategic product and market development options. In particularly, the findings reveal that incremental internationalization is characterized by structural ambidexterity combining product exploitation with market exploration at the initial stages, whereas accelerated internationalization is best explained by market exploration and exploitation (or market ambidexterity) when first entering foreign markets. Moreover, firms were found to maintain strategic priorities through structural and punctuated ambidexterity across product and market domains at later stages of internationalization. This study contributes to the dynamic perspective of strategic ambidexterity for seizing international opportunities among emerging market firms.     

Economic determinants of emerging stock market interdependence

There is a wealth of literature on how integrated stock markets are, but very few studies attempts to determine why stock markets are integrated. However, it is arguably even more important to understand the driving forces behind stock market relationships than to know whether they exist. Such an understanding will provide a better grasp of the functioning of the global stock markets and allow investors and policy-makers to ask additional questions such as: Would an increase in bilateral trade between two countries, for example due to a new trade agreement, change the interdependence of their stock markets? If the growth rate of a particular emerging market falls due to the current global economic downturn, will its stock market drag along all the other stock markets or can it be known beforehand which stock markets are more likely to follow? This study empirically estimates cross-section and time-series models to determine the fundamental factors that influence the correlation and evolvement of the correlation between emerging stock markets.     

The nature of informal food bazaars: Empirical results for Urban Hanoi,Vietnam

This paper aims to study the interesting phenomenon of informal food markets in urban areas, which have been neglected in the past research. Based on an empirical study of consumer choice between informal and formal markets (markets built-up by street hawkers vs. government-planned markets), this paper provides a basis for understanding the nature of informal markets in the Vietnamese context. The results show that cheap price and convenience (proximity) are important in shaping the choice by consumers for informal markets for food, while close relationship with sellers or services provided by sellers are not. Shoppers with higher concern for freshness and safety of fresh food are more likely to shop at formal markets. Additionally, low-income shoppers are found significantly inclined toward informal markets, while higher-income shoppers tend to shop at formal markets. Therefore, these two types of market should be viewed as two marketplaces to serve two segments of consumer groups, rather than two markets competing for a share of the business.     

The Village Network™: Partnership and collaboration to alleviate poverty in subsistence marketplaces

The Village Network is a unique model of poverty alleviation involving the collaboration of a host subsistence market community and a nonprofit organization, typically a university, with a multidisciplinary academic module. All parties in this partnership stand to gain from collaboration. The subsistence market benefits from the skill set and labor provided by the university. The university benefits by placing their students in a position to apply theory guided by the social and economic development experience and insights of the indigenous village leadership. The coordinating organization improves relationships and fosters growth in developing communities. The discussion then focuses on insights about subsistence marketplaces that emerge from this initiative.     

Humanistic Advertising

This article examines the recent ongoing consolidation processes of mega-agencies on the global level and the structure of the international advertising industry to illustrate the dominant power of these large transnational advertising agencies (TNAAs) from the political economic perspective. It discusses motivations behind TNAA expansion, analyses the market share of the world's top ten agencies over a thirty-year period from 1960 to 1989, and examines the current structure of some regional advertising markets, specifically Europe, Latin America and Asia. Findings reveal that the international expansion of TNAAs is motivated by market forces and that major TNAAs continue to perpetuate and dominate the global industry with leverage such as integrated networks, capital and research resources within the conglomerates. Implications of mega-merger movements and TNAA's dominance in the international industry are discussed.     

Go big or stay home? Korean machinery firms,trade fair dynamics and export performance

With heightened global competition, many manufacturers export as a process by which to increase sales and expand into new markets. South Korean manufacturers export in order to expand outside of a small domestic market, but confront the constraints of many exporters (especially smaller firms), including access to market intelligence and geographically distant prospective customers. This article examines efforts by machine tool manufacturers to minimize the friction of distance involved with exporting through the use of international trade fairs. Analytical emphases are placed on the influence of individual export destinations and on the role of firm size vis-à-vis firm export intensities and overall export strategies and motivations.     

Adapted or standardized copy: Is non-cultural English the answer?

International advertisers often wonder whether to adapt their copy to each country they operate in or to globally standardize their message, especially in non-Anglophone markets. While the current business lingua franca is English, how easily can it be introduced into advertising without alienating consumers, and would a simpler English message work better? Does the culture of a brand also influence the impact of English use in non-Anglophone markets? This research examines the interaction between language choice and brand culture in a non-Anglophone market. Specifically, the studies review the value of Globish, a non-cultural form of English. The results suggest that using standardized English copy has relevance in non-Anglophone countries for global brands, but that Globish can also be useful for local brands seeking to upgrade their value in a local market. Globish is shown to be an interesting alternative option in adapting or standardizing advertising strategies. Managerial implications close the paper.     

Temporal product bundling with myopic and strategic consumers: Manifestations and relative effectiveness

Bundling in this era of eCommerce and high technology is a potent and widespread selling tool. The literature has focused on three static bundling strategies under which the products are sold separately (pure components or PC) or only in a bundled form (pure bundling or PB) or both (mixed bundling or MB). In a generalization, and motivated by real world examples, this paper examines the relative effectiveness of temporal bundling. We consider a firm that sells to a market of myopic and strategic consumers, and a selling season consisting of two stages. We compare four strategies – PC-PC (i.e., pure components in each of two stages), PB-PB, PB-PC and PC-PB – relative to MB. Our results show that PB-PB maximizes profits under low marginal costs; PC-PC prevails under high marginal costs given a large proportion of myopic consumers; and PB-PC is profit maximizing under moderate marginal costs when most consumers are strategic. These temporal strategies dominate MB except when the market is comprised entirely of strategic consumers. Finally, while temporal mixed bundling – MB-MB – is weakly superior to other temporal strategies, the latter are much easier to implement, as shown by real-world uses, and suffice to capture most of the profits. Related interesting pricing implications are discussed. Three extensions to the main model are also proposed.     

Choice of Market Entry Mode in Emerging Markets

Summary

This study explores the antecedents of market entry strategy in emerging markets and examines the market environmental, transaction-specific, competitive strategic factors and organizational capability that influence the choice of market entry mode. Empirical results based on a survey of Japanese companies support the combined relevance of their factors on choice of market entry mode in an emerging market. Although most of the mode of entry research assumes that the firm has the option to choose any entry mode in a given market, this study examines the impact of the factors in the internationalization process of firms. The results suggest that experiential knowledge has an immense impact on the choice of entry mode in China, an emerging market with high environmental uncertainty, but also high market potential. The empirical findings also show the important influences of risk-absorption capability and risk-dispersion mechanism on the choice of entry mode into the Chinese market.     

Selecting optimal intermediary channels in emerging markets: The case of Vietnamese toiletries

Abstract

Domestic distribution in Vietnam is characteristic of an emerging market in the beginning stages of modernization, with frequent changes in retail format, a fragmented distribution structure, and ambiguous regulations. This study uses field surveys and comparative analyses of individual enterprises in Vietnam’s toiletry products industry to identify suitable channel strategies for emerging markets in the early stages of distribution modernization. The results indicate that partnership channels are more suitable than hierarchy and market governance channels. Moreover, among the various types of intermediaries, distributors provide a key role in emerging markets where transportation functions are undeveloped. Finally, the study investigates the various methods of partner selection, finding that effectiveness-oriented networks are superior to large-scale efficiency-oriented networks because they have greater channel coverage in modernizing emerging markets. The findings demonstrate the optimal channel structures and partner selection criteria for distributors in emerging markets.     

Systemic small-player market exclusion in an east African context

ABSTRACT

Producer–consumers in Kenya and Uganda face challenges in meeting their subsistence goals. They face a paradoxical inclusion and exclusion from the contemporary market system that the solutions proposed in the agriculture development, subsistence markets and BOP perspectives cannot address because of faults in the pervasive marketing ecosystem perspective. In this article, we go beyond the traditional discussion of producer–consumers’ market access, to include upstream as well as downstream challenges. We introduce the concept of integration gaps to markets as a counterpoint to typical measures of market access. We show the integration gap is a systematic neocolonialist exclusion of producer–consumers that international aid agencies exhorting greater market engagement may worsen. We offer suggestions for improvement from a marketing ecosystem perspective.     

Legitimacy and accelerated internationalisation: An Indian perspective

This paper extends the institutional theory perspective by examining the strategic behaviour of founders of smaller service firms in a key emerging economy—India. Building on accelerated internationalisation and legitimacy literature in the emerging market context, we provide a new perspective, emerging market aggressiveness, which explains why founders/managers are not always passive recipients of their environment. Their selections of locations are dependent on the vision and stretch goals of the founder and their ability to gain legitimacy quickly to move that vision to a reality. They do not appear to be limited by their potential liabilities of newness, foreignness, emergingness or outsidership. They adopt committed modes of entry from the outset to build their legitimacy and reduce their liability as an outsider. Using a qualitative multiple case study approach, we demonstrate that managers are able to use proactive, planned and unplanned strategies simultaneously, in order to quickly prepare themselves to take advantage of transient international opportunities, ahead of their competitors in advanced markets.     

Factors enhancing the choice of higher resource commitment entry modes in international new ventures

The choice of entry mode in foreign markets is an important strategic decision with major consequences for the success of international new ventures (INVs). It is generally accepted that these firms choose relatively low-resource commitment entry modes to operate in foreign markets. Nevertheless, some researchers have suggested that higher resource commitment entry modes in foreign markets also seem to be competitive strategies for INVs. In this study, from a marketing/international entrepreneurship interface perspective and focusing on organizational issues, we center our attention on international market orientation as a neglected yet important factor in INVs’ choice of higher resource commitment entry modes in foreign markets. We suggest that an entrepreneurial orientation and the timing of international entry are important correlates to an international market orientation. We also suggest that the international learning effort of INVs through their international market orientation has a direct, positive impact on the resources these companies commit to their foreign markets through the use of higher resource commitment entry modes. Accordingly, the model proposes a positive effect of entrepreneurial orientation and early international entry on international market orientation which, in turn, is positively related to higher resource commitment entry modes. The hypotheses were tested on country-level data from Spain, using a structural equation model to analyze relationships between the latent variables.This study extends previous international entrepreneurship research, including insights on antecedents of international new ventures’ choice of resource commitment entry modes in foreign markets. The paper also goes further than previous international entrepreneurship research, by addressing the strategic consequences of rapid entry into foreign markets. Additionally, the results of this work encourage international entrepreneurs to look beyond the explicit value of experiential market knowledge to realize the potential value of international market orientation as an antecedent to higher resource commitment entry modes.     

Inheriting the DNA of emergingness: Strategies of advanced market firms under emerging market ownership

Despite growing concerns about emerging market firms (EMFs)' acquisitions in advanced markets, the influences of emerging market ownership on advanced market firms (AMFs) as targets remain largely underexplored. This study aims to conceptually advance our understanding of the environmental adaptation strategies of AMFs under emerging market ownership, focusing on the strategic implications of the “emergingness” encapsulated in the resource transfer from EMF acquirers to AMF targets. Drawing on the institution-based view and resource-based view, this conceptual piece develops an Institution-Resource-Strategy framework and proposes two types of strategies for AMFs under emerging market ownership, namely arbitrage and avoidance, each comprising three varying tactics. We illustrate our propositions using three cases of Japanese firms under Chinese ownership. This study adds to the literature on internationalizing EMFs, the institution-based view of global strategies, and cross-border mergers and acquisitions and offers managerial implications for emerging and advanced market stakeholders.     

A direct comparative framework of customer satisfaction: An application to Internet search engines

Traditionally, satisfaction evaluations have been studied in the expectancy-disconfirmation paradigm in which customers compare firm performance to expectations. The current customer-satisfaction framework incorporates competitive comparisons indirectly through expectations. However, in markets in which competing alternatives are often primed in the evaluation context (e.g., product and retailer information presented in Bizrate.com), customers may directly compare performance and satisfaction across competing alternatives.In this article, we develop a direct comparative framework (DCF) of customer satisfaction. To make our DCF managerially useful, we also develop an operational model that managers can use to draw strategic insights based on customers’ satisfaction evaluations. We demonstrate our framework and operational model by applying them to the Internet search-engine market.     

Exploring and investigating sustainable international business practices by MNEs in emerging markets

While there are a number of dimensions to sustainability, ranging from the environmental to the social, a common assumption in the literature is that firms from the mature markets are more likely to have the capacity and indeed, rationale to take sustainability more seriously. Emerging market counterparts, MNEs included, are seen to lag behind in sustainable practices. However, recent developments challenge this conventional wisdom. This article introduces the special issue on ‘Sustainable International Business Practices by MNEs in Emerging Markets, and highlights emerging themes which are promising future directions for theoretical and empirical enquiry.     

Understanding subsistence marketplaces: Toward sustainable consumption and commerce for a better world

This article provides the background and the events leading up to this special issue, and the composition of articles that follow. This special issue includes articles that take a bottom-up approach in understanding and explaining subsistence marketplaces, focusing on individual, communal, and cultural factors that influence consumers and entrepreneurs who live at or near subsistence, and who comprise a majority of the world's population. This bottom-up focus is distinct and complementary to the macro-level economic development and mid-level business strategy (e.g., base of the pyramid) approaches to the role of business in poverty alleviation. This special issue consists largely of papers based on presentations at the second subsistence marketplace conference held in Chicago in 2008, with articles and essays reflecting a healthy commingling of disciplinary perspectives that cuts across social and commercial enterprises.