In their very nature Emerging markets are the markets in a transitional phase between developing and developed status that have a rapid pa...
In their very nature Emerging markets are the markets in a transitional phase between developing and developed status that have a rapid pace of economic development and boast government policies favoring economic liberalization and a free-market system.
The population of emerging market is hungry for new products and the potential for growth in emerging markets can be judge by these figures. Net portfolio inflows into emerging markets was $50.2 billion (U.S.) in 2007, $15.2 billion (U.S.) in 2006 and $12.5 billion (U.S.) in 2005. In China Foreign direct investments from Japan alone have increased from $2,317 million to $6,169 million at 166% during the period 1996 to 2006.
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Multinational enterprises forces local managers to compete with the foreign firms or faces the prospect of extinction. Even in this scenario emerging market organizations performed well. Attaining sustained competitive advantage becomes the key for many companies’ survival.
The trend of increased spending in research and development has been observed among big organizations of emerging markets. This was only possible due to effective management of resources. Sustainable competitive advantage can be achieved by registering more new patents.
Market orientation, superior quality products and services, ethical corporate values and economies of scale among others have been suggested as possible ways of achieving competitive advantages.
An alternative to such strategies; that is, achieving sustainable competitive advantage through better resource management based on competence-based/resource-based strategic management theories.
The difference of the mixed available resources between enterprises, the speed with which resources are used and developed, and the costs which are involved is determinative for the realization of the organizations competitive advantage.
There are many successful companies in emerging markets like Brazil, Russia, India and China that have become world-spanning multinational enterprises in face of severe competition from well-established multinational enterprises from developed countries.
Identifying best practices in resource management of such successful multinational enterprises from emerging markets provides effective benchmarking for other firms in emerging markets as it helps crack through resistance to change by demonstrating other methods of solving problems than the one currently employed, and demonstrating that they work, because they are being used by others.
Knowledge-based assets should not be ignored just because they are often hard to measure and take a long time to materialize. Patents, for example, embody stocks of accumulated knowledge — not only just from one or two years, but also from many years.
Managers should encourage and invest in improving learning and innovating capabilities within the firm some examples of the firms from emerging markets who are able to do this are
From Brazil, Embraer has become a big supplier of regional jets in the airline industry. Russian companies like Gazprom are using Russia’s natural resources to leap into the United States and other countries. India is producing powerhouses in technology services like Wipro. In China Haier is emerging in appliances and Huawei Technologies is competing against Cisco Systems to sell telecommunications equipment around the world.
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