How can multinational from emerging markets compete globally?
What will be an ideal response?
Despite the flourishing position of EM firms in the current economy, with increased liberalization, the importance of firm-specific assets such as local know-how, and cost efficiency can decrease because MNE presence in EMs enables these firms access to similar assets as well.
In some cases EM firms are able to utilize their local knowledge and create a niche market of similar customers internationally. In other cases, EM firms can invest in developed economies in order to access strategic assets and know-how. In doing so, while many firms from EMs have engaged in acquisitions, others have chosen to internationalize gradually, increasing their commitment level in parallel to accumulation of experience and know-how in the developed economy.
Many EM MNEs are concentrating on undertaking value chain activities and specializing in these areas and thereby investing in developed markets by following their MNE customers. They can specialize in a section of the production chain globally.
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