Strategies for Local Companies in Emerging Markets

Question

What are the Strategies for Local Companies in Emerging Markets?

Answer 1

Strategies for Local Companies in Emerging Markets:

1. Best strategic approaches hinge on (i) whether competitive resources are appropriate only for the home market or can be transferred abroad and (ii) whether industry pressures to move toward global competition are weak or strong.

2. Strategy choices for Local Companies in Competing Against the Global Companies, shows the four generic choices.

3. Using Home-Field benefits: When the pressures for global competition are low and a local firm has competitive powers well suitable to the local market, a good strategy choice is to focus on the benefits enjoyed in the home market, cater to consumers who prefer a local touch, and accept the loss of consumers attracted to global brands.

4. Moving the Company’s Expertise to Cross-Border Markets: When a company has resource capabilities and strengths appropriate for competing in other country markets, starting initiatives to move its expertise to cross-border markets becomes a feasible strategic choice.

5. Shifting to a Market Niche or New Business Model: When industry pressures to globalize are high, any of the following three choices make the most sense:

    i. Shift the business to a part of the industry value chain where the firm’s expertise and resources give competitive benefit.

      ii. Enter into a combined venture with an internationally competitive partner.

     iii. Sell out to or be obtained by a global entrant into the home market who concludes the company would be a high-quality entry vehicle

6. Contending on a Global stage: If a local company in an emerging market has moveable capabilities and resources, it can sometimes start winning initiatives to meet the pressures for globalization head-on and begin to fight on a global level itself.