Contextualizing international strategy by emerging market firms: A composition-based approach |
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| Institution: | 1. Department of Management, School of Business Administration, University of Miami, Coral Gables, FL 33124-9145, United States;2. Sun Yat-Sen Business School, Sun Yat-Sen University, Guangzhou, China;1. Ivey Business School, Western University Canada, 1255 Western Road, London, ON N6G 0N1, Canada;2. siTechnologygroup, Inc., 213 Bournemouth Drive, London, ON N5V 4S8, Canada;3. University of Calgary, 2500 University Dr NW, Calgary, AB T2N 1N4, Canada;1. Faculty of Business Administration, University of Macau, Macau;2. Nottingham University Business School, University of Nottingham, United Kingdom;3. School of International Trade and Economics, University of International Business and Economics, 10 East Huixin Street, Chaoyang District, Beijing 100029, China;4. Leeds University Business School, United Kingdom;5. Department of Economics, University of Macau, Macau;1. European School of Management and Technology (ESMT), Schlossplatz 1, 10178 Berlin, Germany;2. Florida International University, Miami, FL 33199, USA;3. Loyola Marymount University, Los Angeles, CA 90045-2659, USA;1. Gordon Institute of Business Science, University of Pretoria, 25 Fricker Road, Illovo, Johannesburg, 2146, South Africa;2. University of Sussex, Jubilee Building, Falmer, Brighton, BN1 9RH, UK;3. Graduate School of Business, University of Cape Town, 8 Portswood Road, V&A Waterfront, Cape Town, 8002, South Africa |
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| Abstract: | We present a composition-based logic toward international expansion by emerging market firms (EMFs) – firms that use compositional investment, compositional competition, and compositional collaboration to create a unique competitive advantage in global competition. This view explains how EMFs creatively adopt a composition-based international strategy, enabling them to compensate for their weaknesses while capitalizing on their strengths during global competition where they offer a competitive price-value ratio suited to mass global customers who are cost sensitive. We also explicated the working conditions (i.e., strategic resource-seeking motivation, subsidiary autonomy delegation, and cross-border sharing system) that fortify the outcome of composition. Using survey data from 201 EMFs, our analysis supports these key arguments. A composition-based lens provides a new understanding of why and how emerging market businesses can survive in international competition for some period of time without possessing traditionally defined monopolistic advantages. |
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| Keywords: | Composition-based strategy Emerging market firms International competition |
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