The New Emerging Market Multinationals
The book, new emerging market multinationals started with explaining Taiwan’s HTC-the highly anticipated smart phones in 2011 with revenue of 600 million. The author mentioned that the large multinationals are not from United States, Europe or Japan but are from China,India, Brazil, Russia, Turkey and South Africa whose per capita income is about $US10000 when compared with income of $34000 elsewhere.
The book pinpointed the challenges forced by the EMNC (Emerging Multinational companies) whether to build global business model or develop global brand. Developing a global brand with no business model is waste of time and resources.The author researched 39 multinationals and came up with 4 strategies that drive the growth of the companies in emerging countries,
They are as follows by the author’s words,
• COST LEADERS leverage existing low-cost structures and large-scale volumes to extend their reach into developed markets.
• KNOWLEDGE LEVERAGERS tap their existing resources and knowledge of home consumers and the market to build branded businesses in other emerging markets.
• NICHE CUSTOMIZERS combine their cost advantages in manufacturing with newly developed low-cost R&D capabilities to develop customized niche-segment branded offerings in
• GLOBAL BRAND BUILDERS use their low-cost manufacturing and R&D capabilities to build branded businesses in developed markets— but limit their focus to specific products and segments through a process of focused innovation.The companies went international to learn about global standards to learn about global standards to be able to fight the encroaching local rivals .For instance, the Taj Group needed to portray itself as international in its home market to compete against the new global entrants.Praveen Jaipuriar, Dabur's Senior General Manager for Marketing, who had this to say when questioned about global: "We know if we do not have a certain capability, we can acquire it or even pay and get the best in the field to do the research for us.
As per extensive study done by author, the main reason that the companies went global is that the EMNC have
1. AMBITION
2. VISION
3. CONFIDENCE TO BECOME GLOBAL GIANTS
WHY DO BRANDS MATTER?
A brand first increases the volume and secondly improves the margins. To quote Husamettinonac of Turkey’s Vitra: ”Brands are very important. If you are not a brand, you cannot capture the value added sufficiently. There are enough commodities in the world. At the moment you can buy similar products from China at half price .They are nice imitations. There are always people who make them cheaper than us.That’s why it’s a 100% must for us to be a EMNC’S typically have the skills and the size to be able to manufacture height-quality products at a relatively low per unit cost. The EMNC company’s costs are also lower. EMNC can more easily afford to create customized products for particular market segments.While these EMNC ‘s have access to cheaper R&D human talent ,they are usually not yet at the high technical level and scale to pioneer really high end technical capabilities. They naturally lack the large global organizations.
The book on a whole puts forward its emphasis on the emerging economies as being hotspots of upcoming multinational firms rather than the wide held conception of European and Japanese saturated markets. It also tends to change the reader’s assumptions about international economic competition and his views on the ultimate winner of Corporate Wars, which on its personal note is more inclined towards a contradictory answer.
The book, new emerging market multinationals started with explaining Taiwan’s HTC-the highly anticipated smart phones in 2011 with revenue of 600 million. The author mentioned that the large multinationals are not from United States, Europe or Japan but are from China,India, Brazil, Russia, Turkey and South Africa whose per capita income is about $US10000 when compared with income of $34000 elsewhere.
The book pinpointed the challenges forced by the EMNC (Emerging Multinational companies) whether to build global business model or develop global brand. Developing a global brand with no business model is waste of time and resources.The author researched 39 multinationals and came up with 4 strategies that drive the growth of the companies in emerging countries,
They are as follows by the author’s words,
• COST LEADERS leverage existing low-cost structures and large-scale volumes to extend their reach into developed markets.
• KNOWLEDGE LEVERAGERS tap their existing resources and knowledge of home consumers and the market to build branded businesses in other emerging markets.
• NICHE CUSTOMIZERS combine their cost advantages in manufacturing with newly developed low-cost R&D capabilities to develop customized niche-segment branded offerings in
• GLOBAL BRAND BUILDERS use their low-cost manufacturing and R&D capabilities to build branded businesses in developed markets— but limit their focus to specific products and segments through a process of focused innovation.The companies went international to learn about global standards to learn about global standards to be able to fight the encroaching local rivals .For instance, the Taj Group needed to portray itself as international in its home market to compete against the new global entrants.Praveen Jaipuriar, Dabur's Senior General Manager for Marketing, who had this to say when questioned about global: "We know if we do not have a certain capability, we can acquire it or even pay and get the best in the field to do the research for us.
As per extensive study done by author, the main reason that the companies went global is that the EMNC have
1. AMBITION
2. VISION
3. CONFIDENCE TO BECOME GLOBAL GIANTS
WHY DO BRANDS MATTER?
A brand first increases the volume and secondly improves the margins. To quote Husamettinonac of Turkey’s Vitra: ”Brands are very important. If you are not a brand, you cannot capture the value added sufficiently. There are enough commodities in the world. At the moment you can buy similar products from China at half price .They are nice imitations. There are always people who make them cheaper than us.That’s why it’s a 100% must for us to be a EMNC’S typically have the skills and the size to be able to manufacture height-quality products at a relatively low per unit cost. The EMNC company’s costs are also lower. EMNC can more easily afford to create customized products for particular market segments.While these EMNC ‘s have access to cheaper R&D human talent ,they are usually not yet at the high technical level and scale to pioneer really high end technical capabilities. They naturally lack the large global organizations.
The book on a whole puts forward its emphasis on the emerging economies as being hotspots of upcoming multinational firms rather than the wide held conception of European and Japanese saturated markets. It also tends to change the reader’s assumptions about international economic competition and his views on the ultimate winner of Corporate Wars, which on its personal note is more inclined towards a contradictory answer.
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