Emerging Markets

785 Words2 Pages

Globalization is a double-edged sword, smart local companies have used the benefits of globalization to close gaps in technology, capital, and talent with their rivals from the developed world. Local firms act strategically in order to keep the multinational out of the competition, this attempts the local companies to capitalize the local presence & the command over the cultural & economical environment in their home country. In this paper we will try to highlight on the fact that local firms can compete successfully to MNC with close to Kingfisher & Haier as examples.

Regional firms are at sword when there is influx of MNC’s into the market, this when taken as a positive element creates a Glocal firm (Lecture-note of Chung L) which is competitive enough in providing international standards with a local touch similar to those of transnational companies. This development was depicted by companies like Haier & Kingfisher in China & India respectively. Both these companies are today’s dominant giant firms in their respective fields. These companies used the cultural approach in understanding at grass-root level the local consumer & the society’s psychology collectively. Firms located locally do harness the human capital market extensively in order to be competitive & also be strong at one parameter during contingency. Companies do try to obtain intellectual rights over any new technological improvement which is credit to their R&D.

Local giants do have a strong framework in institutional characteristics, companies like Haier & Kingfisher have political capital, which leads to protecting the local firm against the international MNC’s. Competing in emerging markets for MNC’s is difficult due to the unstable political scenario which ...

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...tic firm by implicating heavy excise duties to operate for MNC. In relation to India there is 100% duty on beverage & also 65% of the market is regulated by the government. Government with interest of the socio-cultural aspect of the society bans the advertisement of adulterated products which keep potential advantage for the company which is established when these norms were not amended.

In conclusion the sword of threat is to both players i.e., the local player as well as to the penetrator. It is important to analyze & understand the institutional characteristics & design policies or competitive strategies efficient to sustain efficiently in the market to maximize the market share & create a image so strong that the brand is used as a metaphor for the product-line. After all, it often takes only one strong homegrown champion to off-shore a MNC form its market.

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