Strategic Management

Over the past two decades, liberalization have washed away protection barriers in developing countries. Many local companies lost market share or sold off business, but on the other hand, some restructured their business, exploited new opportunities and built world-class companies.

Some emerging giants compete in several countries, e.g Lenovo, Huawei Tech, Tata Group, etc. But, others operate mainly at home. Therefore, it is interesting to study strategies and business models implemented by emerging giants to achieve their success. Khanna & Palepu try to address this issue in their paper, by studying 134 major companies in ten emerging markets.

Companies from developed countries appear to hold advantages, meanwhile companies from developing countries lack the soft infrastructure. Some institutional voids:

absence of specialized intermediaries, regulatory systems, and contract enforcing mechanisms,

have caused corporation in emerging market cannot access capital or talent easily and inexpensively.

However, corporation in emerging market can overcome such disadvantage for there reasons :

• Executives from multinational companies are ill equipped to deal with institutional voids such as unsophisticated market research data and unreliable supply chain partners in developing countries

• Once companies from emerging markets have demonstrated a degree of success, they can tap capital and talent market in developed countries, too for e.g by listing on NYSE or Nasdaq.

• Multinational companies are reluctant to tailor their strategies to every developing markets in which they operate. Their organizational process and cost structure make it difficult to sell product at optimal price in emerging markets. They often end up only servicing niches.

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