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Contextualizing international strategy by emerging market firms: A composition-based approach

Yadong Luo and Juan Bu

Journal of World Business, 2018, vol. 53, issue 3, 337-355

Abstract: We present a composition-based logic toward international expansion by emerging market firms (EMFs) – firms that use compositional investment, compositional competition, and compositional collaboration to create a unique competitive advantage in global competition. This view explains how EMFs creatively adopt a composition-based international strategy, enabling them to compensate for their weaknesses while capitalizing on their strengths during global competition where they offer a competitive price-value ratio suited to mass global customers who are cost sensitive. We also explicated the working conditions (i.e., strategic resource-seeking motivation, subsidiary autonomy delegation, and cross-border sharing system) that fortify the outcome of composition. Using survey data from 201 EMFs, our analysis supports these key arguments. A composition-based lens provides a new understanding of why and how emerging market businesses can survive in international competition for some period of time without possessing traditionally defined monopolistic advantages.

Keywords: Composition-based strategy; Emerging market firms; International competition (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:eee:worbus:v:53:y:2018:i:3:p:337-355