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

Yadong Luo, Juan Bu

Research output: Contribution to journalArticle

22 Scopus citations

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.

Original languageEnglish (US)
JournalJournal of World Business
DOIs
StateAccepted/In press - Oct 19 2015

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Keywords

  • Composition-based strategy
  • Emerging market firms
  • International competition

ASJC Scopus subject areas

  • Business and International Management
  • Finance
  • Marketing

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