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Strategic Approaches for Local Companies Facing Foreign Competition in Emerging Markets

In today’s global marketplace, local companies in emerging markets must devise effective strategies to compete against multinational giants. This article outlines the challenges posed by foreign entrants—such as superior technology, established brands, and robust financial resources—and presents a six-part strategy for local firms. Key tactics include understanding local customers, leveraging low-cost labor, investing in talent, and scaling operations quickly to mitigate disadvantages. By focusing on tailored solutions and innovation, local companies can defend their market position and even thrive.

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Strategic Approaches for Local Companies Facing Foreign Competition in Emerging Markets

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Presentation Transcript

  1. Corporate Strategy Strategy Making in the Emerging Market Context

  2. Themes for Today • What to do when foreign competition strikes your home market? • What strategies can local companies follow to successfully defend against multinational companies? • Battacharya & Michael • Dawar & Frost • Serving the World’s Poor Profitably • Prahalad & Hammond

  3. Article: “Competing With Giants . . .” • Foreign Competition could come in with • More financial resources • Advanced technology • Superior product • Established brands • Marketing and Management Skills • Little Guidance is Available and Hence Businesses either • Ask for Trade barriers • Sell out to Rivals • Become a Subordinate Partner

  4. Article: “How Local Companies . . .” • Six-Part Strategy • Create Customized Products and Services - Can you understand local customers better and offer a better value? • Develop Business Models to Overcome Key Obstacles - Can you work around the system? • Deploy the Latest Technologies - Can you reduce cost and increase differentiation?

  5. Article: “How Local Companies . . .” • Six-Part Strategy [continued] 4. Take Advantage of Low-Cost Labor and Train Staff In-house - Can you exploit high quality local labor? 5. Scale Up Quickly - Can you grow fast enough to nullify your weakness? 6. Invest in Talent to Sustain Rapid Growth - Can you share rewards and motivate people to do their best?

  6. “Defying the Odds . . .” • Automation • Standardization • Job Order to Mass Production • Speed • Features • Computerized Design • Efficiency with Flexibility

  7. Article: “Competing With Giants . . .”

  8. Article: “Competing With Giants . . .” • Dodger • Rethink your business model as the pressure to globalize are strong. • e.g. Vist of Russia • Defender • Fine tune your products/services to the particular and often unique needs of customers. • e.g., Jahwa of China • Extender • They leverage their assets by seeking analogous markets – those similar to their home base in terms of consumer preference, geographic proximity, distribution channels, etc. • e.g., Televisa of Mexico • Contender • Become a global player by focusing on a narrow niche. • e.g. Arvind Mills of India

  9. Serving the World’s Poor - Profitably • Untapped Potential • Business Case • Top-Line Growth • Reduced Costs • Innovation

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