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
