Strategies emerging market MNEs employ Essay Example | Topics and Well Written Essays - 3000 words

Strategies emerging market MNEs employ - Essay Example Their point is to achieve a certain level of competitive advantage, but such kind of advantage can hardly be generated if some essential strategies or strategic actions will not be employed. Concerning this point, it is important to create an illustration on how exactly some firms create strategies in order to generate their portion in the pie. Knowing how some firms established their market especially those new entrants is as good as finding how they initiate strategies in order to make a difference. Regarding this, the work at hand covers the points elucidating the unique strategies that the emerging market multinational enterprises (MNEs) employ in pursuing globalization or international expansion in comparison to the moves of MNEs from developed countries. The traditional MNE is characterised by foreign direct investment (FDI), which generally is all about firm-specific capabilities created at home country and momentarily expanded towards country-by-country way of internationalis ation (Guillà ©n and Canal, 2009). According to Guillà ©n and Canal, this model was most popular much of the post-World War II. However, today, new existing MNEs from emerging markets are trying to make a difference in order to go for an international expansion. Knowing what these strategies are is the main focus of the work at hand. Prior to this, it is also important to understand the traditional model of MNE first to provide the essential foundation of comparison to its new MNE counterparts comprising new emerging MNEs and those from developed economies. Understanding traditional model of MNE Strengths pertaining to technology, marketing and managerial capability were important common features of the old model of MNE during the post-World War II (Guillen and Canal, 2009). According to Guillen and Canal, advanced multinational firms in Japan, North America and Europe participated in this activity and eventually created their market share and initiated international expansion. Fi rst, one can spot the point that multinational companies rely on their ability to employ advanced technologies. The implementation of technology is important in the issue of globalisation or international expansion (Alvarez and Marin, 2013; Holm and Sharma, 2006). The transfer of technology was viewed a significant component of global expansion because that will have to ensure operation and formulation of product or service offerings sustained at the most convenient and fast-paced approach. On the other hand, the idea of initiating marketing strategy is founded by the ability of the firm to understand the needs in the market. However, the idea might be eventually confined within the basic consideration of subsidiary marketing knowledge as this can be the essential foundation on how to go for international expansion (Holm and Sharma, 2006). Finally, the traditional model of MNE has to include the concept of managerial capability, as this has significant impact on the resource profile of the subsidiaries (Manev, 2003). This will have to fuel the right decision-making process in order to sustain survival of the firm in the international setting where there are other potential factors to keep constantly in mind such as culture, politics, social concerns and other considerations. In addition to all of these, Guillen and Canal added that the traditional model of MNE employed traditional product differentiation strategies and vertically integrated structures. All of these have specific advantages as integrated along with the existing practices of the emerging market MNEs, but at some point they may also provide a significant explanation as to why the emerging market and developed economy MNEs may have outsmarted the traditional