Emerging multinationals in emerging markets

"Why have so many firms in emerging economies internationalised quite aggressively in the last decade? What competitive advantages do these firms enjoy and what are the origins of those advantages? Through what strategies have they built their global presence? How is their internationalization affecting Western rivals? And, finally, what does all this mean for mainstream international business theory? In Emerging Multinationals in Emerging Markets, a distinguished group of international business scholars tackle these questions based on a shared research design. The heart of the book contains detailed studies of emerging-market multinationals (EMNEs) from the BRIC economies, plus Israel, Mexico, South Africa, and Thailand. The studies show that EMNEs come in many shapes and sizes, depending on the home-country context. Furthermore, EMNEs leverage distinctive competitive advantages and pursue distinctive internationalization paths. This timely analysis of EMNEs promises to enrich mainstream models of how firms internationalize in today's global economy"--Provided by publisher. Read more... Half-title 5 Title 7 Copyright 8 Dedication 9 Contents 11 List of figures page 13 List of tables 15 List of abbreviations 17 List of contributors 19 Acknowledgments 21 Part I: Introduction 23 1 Why study emerging-market multinationals? 25 Multinationals from rich and poor countries 27 Research questions and prevailing IB theory 32 Overview of the book 38 References 41 2 Third World multinationals: A look back 45 Underlying arguments of earlier work 45 Dated ideas 48 Ideas still relevant 50 Search for cheaper labor 50 Innovation of products for emerging markets 52 Other conventional explanations 53 New phenomena? 55 State investment 55 Search for marketing skills 57 Relocation 58 Non-national 58 New service firms 59 Some additional research questions 60 Warnings for research in the area 61 Go beyond the country studies 61 Study industries 62 Consider the incomplete Darwinian process 63 3 Theoretical aspects of MNEs from emerging economies 64 The world's largest multinationals 66 The regional aspects of multinational enterprises 67 Multinationals from emerging markets 68 Internalization theory and emerging economy MNEs 72 The FSAs and CSAs of emerging economy MNEs 74 Asia's multinationals 77 Applying the FSA/CSA matrix in Asia 78 Conclusions 81 References 83 4 Does firm ownership matter? POEs vs. FOEs in the developing world 86 Business groups 88 De-colonization and the destiny of FOEs 90 Services 95 Conclusion 96 References 98 Part II: Country Studies 101 5 Chinese multinationals: Emerging through new global gateways 103 Cost innovation: From country-specific to firm-specific advantage 104 Strategies for leveraging cost innovation advantages 107 Local optimizer 107 Lost-cost partner 108 Global consolidator 109 Global first-mover 110 Globalization opens new gateways to entry 113 Outsourcing opens the gates 114 Modular products and services 115 The codification of knowledge 116 Concentration and internationalization of retailing 117 Globalization of the markets for talent and services 118 Weaknesses of the emerging Chinese multinationals 121 Limited size of the Chinese and developing markets 122 Immature industries 123 Systemic businesses 124 Intangible assets 125 An additional generic strategy: The demand wedge 126 Using the demand wedge 127 Conclusion: The emergence of Chinese multinationals will reshape global competition 130 References 131 6 Indian multinationals: Generic internationalization strategies 132 India's first and second waves of outward FDI 135 Emerging Indian multinationals 138 Strategies for internationalization 146 Generic strategy 1: The local optimizer 150 Illustrative example 153 Generic strategy 2: Low-cost partner 156 Illustrative examples 158 Generic strategy 3: The global (or regional) consolidator 162 Illustrative examples 165 Generic strategy 4: The global first-mover 168 Illustrative example 169 Combining or morphing across generic strategies 174 Pathways for strategy migration 176 Non-Indian examples 179 Summary and some future directions 180 References 183 7 Russian multinationals: Natural resource champions 189 The Russian economy 190 Energy-driven 191 Role of the government 193 The rise of Russian MNEs 196 Origins in the 1990s privatization era 196 Putin government's economic strategy supports MNEs 198 MNE industry sectors 199 MNE corporate goals 202 Growth strategies for building international presence 203 Sustainability of MNE competitive advantages 206 Russian MNEs have changed global dynamics 209 Implications of Russian MNEs’ global strategies 211 For emerging-market firms 211 For Western and Japanese MNEs 213 For natural resource-reliant MNEs 213 For natural resource-based MNEs 213 For non-natural resource-based MNEs 214 For Russian public policy makers 215 Conclusion 216 References 218 8 Brazilian multinationals: Surfing the waves of internationalization 222 The evolution of industry in Brazil during the twentieth century 223 Industry in Brazil before the first wave: 1900–1950 223 Speeding up the industrialization project: The 1950s 224 The 1960s and 1970s: Slowing down and speeding up again 225 The exhaustion of the import substitution model: 1975–1990 228 Industrial restructuring in the 1990s 229 Analysis of Brazil's emerging multinationals 232 The local institutional environment 232 The Mercosur experience 232 The Brazilian MNEs: An overall view 233 Brazilian multinationals: Selected case studies 237 Resource-based Brazilian MNEs 237 Petrobras 237 Companhia Vale do Rio Doce – CVRD 239 Comments 241 The basic input suppliers' Brazilian MNEs 242 Companhia Siderurgica Nacional – CSN 242 Gerdau 243 Comments 245 The construction suppliers' Brazilian MNEs 246 Tigre 246 Duratex 247 Comments 248 The consumer goods Brazilian MNEs 248 InBev/AmBev 249 Coteminas 250 Comments 251 The equipment suppliers' Brazilian MNEs 252 Sabo 253 WEG 253 Comments 255 The Brazilian systems assemblers 255 Embraer 255 Marcopolo 257 Comments 258 Final comments and conclusions 259 References 263 9 South African multinationals: Building on a unique legacy 266 Where does South African big business come from? 267 Patterns of internationalization 271 Aggregate stocks and flows 272 Geographic distribution 272 Mode of entry 275 South African firms in the global economy 279 Patterns of internationalization 283 Firm-and country-specific competitive advantages 283 Firm-specific ownership advantages 283 Country-specific location and political advantages 284 Historical and personal relationships 284 Conditions in local and global markets 284 Analytic narratives of transnationalization 285 Extensive internationalization and entry into developed-country markets 285 Regional multinationalization 290 Mixed internationalization 292 Conclusions 295 References 298 Appendix: Case selection and data compilation 300 10 Mexican multinationals: Insights from CEMEX 302 Why do MNEs (and EMNEs) exist? 305 The CEMEX case 311 Laying the groundwork for internationalization 312 Stepping out 314 Accelerating internationalization and consolidating the CEMEX Way 317 Stepping up 320 Extending the theory of EMNEs 323 Conclusions 328 References 329 11 Thai multinationals: Entering the big league 334 Review of the literature 335 Outward FDI from developing countries: When, where, and how 335 Competitive advantages of multinationals from developing economies 336 Thailand's outward FDI: Patterns and trends 338 Case studies 344 The CP group 345 The Siam Cement Group (SCG) 347 The S&P group 352 PTT 353 Case comparison 356 Geographical spread 356 Motives 359 Nature of competitive advantages 361 Conclusion: Past, present, and future of Thai multinationals 365 References 368 Websites 373 12 Israeli multinationals: Competing from a small open economy 374 Israel – the country and its economy 376 The new managers 382 One successful example – Teva Pharmaceutical Industries 386 Outward FDI from Israel: Facts and figures 390 A case study of a successful born global 402 Some lessons from the Israeli experience 405 A few public policy issues 410 Conclusions 413 References 416 Part III: Conclusions 419 13 What have we learned about emerging-market MNEs? 421 The competitive advantages of EMNEs 424 Country-specific advantages 424 Firm-specific advantages 426 Products suited to emerging markets 427 Production and operational excellence 429 Privileged access to resources and markets 429 Adversity advantage 431 Traditional intangible assets 431 Generic internationalization strategie 432 Impact on global competition 438 Implications for IB theory 440 Index 449 Why Have So Many Firms In Emerging Economies Internationalised Quite Aggressively In The Last Decade? What Competitive Advantages Do These Firms Enjoy And What Are The Origins Of Those Advantages? A Distinguished Group Of International Business Scholars Tackle These Questions And More Based On A Shared Research Design. Why Study Emerging-market Multinationals? / Ravi Ramamurti -- Third World Multinationals : A Look Back / Louis T. Wells Jr. -- Theoretical Aspects Of Mnes From Emerging Economies / Alan M. Rugman -- Does Firm Ownership Matter? Poes Vs. Foes In The Developing World / Alice H. Amsden -- Chinese Multinationals : Emerging Through New Global Gateways / Peter J. Williamson And Ming Zeng -- Indian Multinationals : Generic Internationalization Strategies / Ravi Ramamurti And Jitendra V. Singh -- Russian Multinationals : Natural Resource Champions / Daniel J. Mccarthy, Sheila M. Puffer, And Oleg S. Vikhanski -- Brazilian Multinationals : Surfing The Waves Of Internationalization / Afonso Fleury And Maria Tereza Leme Fleury -- South African Multinationals : Building On A Unique Legacy / Andrea Goldstein And Wilson Prichard -- Mexican Multinationals : Insights From Cemex / Donald R. Lessard And Rafel Lucea -- Thai Multinationals : Entering The Big League / Pavida Pananond -- Israeli Multinationals : Competing From A Small Open Economy / Yair Aharoni -- What Have We Learned About Emerging-market Mnes? / Ravi Ramamurti. Edited By Ravi Ramamurti And Jitendra V. Singh. Includes Bibliographical References And Index. Content: Why study emerging-market multinationals? / Ravi Ramamurti -- Third world multinationals : a look back / Louis T. Wells Jr. -- Theoretical aspects of MNEs from emerging economies / Alan M. Rugman -- Does firm ownership matter? POEs vs. FOEs in the developing world / Alice H. Amsden -- Chinese multinationals : emerging through new global gateways / Peter J. Williamson and Ming Zeng -- Indian multinationals : generic internationalization strategies / Ravi Ramamurti and Jitendra V. Singh -- Russian multinationals : natural resource champions / Daniel J. McCarthy, Sheila M. Puffer, and Oleg S. Vikhanski -- Brazilian multinationals : surfing the waves of internationalization / Afonso Fleury and Maria Tereza Leme Fleury -- South African multinationals : building on a unique legacy / Andrea Goldstein and Wilson Prichard -- Mexican multinationals : insights from CEMEX / Donald R. Lessard and Rafel Lucea -- Thai multinationals : entering the big league / Pavida Pananond -- Israeli multinationals : competing from a small open economy / Yair Aharoni -- What have we learned about emerging-market MNEs? / Ravi Ramamurti. Abstract: A distinguished group of international business scholars present detailed studies of emerging-market multinationals (EMNEs). Read more... "Why have so many firms in emerging economies internationalised quite aggressively in the last decade? What competitive advantages do these firms enjoy and what are the origins of those advantages? Through what strategies have they built their global presence? How is their internationalization affecting Western rivals? And, finally, what does all this mean for mainstream international business theory? In Emerging Multinationals in Emerging Markets, a distinguished group of international business scholars tackle these questions based on a shared research design. The heart of the book contains detailed studies of emerging-market multinationals (EMNEs) from the BRIC economies, plus Israel, Mexico, South Africa, and Thailand. The studies show that EMNEs come in many shapes and sizes, depending on the home-country context. Furthermore, EMNEs leverage distinctive competitive advantages and pursue distinctive internationalization paths. This timely analysis of EMNEs promises to enrich mainstream models of how firms internationalize in today's global economy"-- Résumé de l'éditeur Why have so many firms in emerging economies internationalized quite aggressively in the last decade? What competitive advantages do these firms enjoy and what are the origins of those advantages? Through what strategies have they built their global presence? How is their internationalization affecting Western rivals? And, finally, what does all this mean for mainstream international business theory? In Emerging Multinationals in Emerging Markets, a distinguished group of international business scholars tackle these questions based on a shared research design. The heart of the book contains detailed studies of emerging-market multinationals (EMNEs) from the BRIC economies, plus Israel, Mexico, South Africa, and Thailand. The studies show that EMNEs come in many shapes and sizes, depending on the home-country context. Furthermore, EMNEs leverage distinctive competitive advantages and pursue distinctive internationalization paths. This timely analysis of EMNEs promises to enrich mainstream models of how firms internationalize in today's global economy.