Uncommoditizing Strategies by Emerging Market Firms
Cuervo-Cazurra, A., Carneiro, J., Finchelstein, D., Duran, P., Gonzalez-Perez, M. A., Montoya, M. A., Borda Reyes, A., Fleury, M. T. L., Newburry, W. 2018. Uncommoditizing strategies by emerging market firms. Multinational Business Review (Forthcoming)
31 Pages Posted: 12 Jun 2018 Last revised: 11 Dec 2018
Date Written: May 13, 2018
Abstract
We analyze how emerging market firms upgrade their capabilities to international levels. We focus on the development of uncommoditizing strategies that enable emerging market firms to go beyond the usual price competition with low-quality products and, instead, serve customers with premium pricing and quality and reputable products. From the analysis of eighteen Latin American companies from six countries in a variety of industries, we propose three dimensions of uncommoditizing strategies:
(1) tropicalized innovation, in which firms develop product innovations and brands that are adapted to the needs of emerging economies, enabling them to differentiate their products;
(2) global efficiency, in which firms develop efficient processes that reduce costs, helping them to generate reliable and high-quality products; and
(3) coordinated control, in which firms expand their presence into higher value added segments of global value chains to achieve control and use fast decision making to ensure rapid response to new customer demands.
Keywords: competitive advantage, strategies, upgrading, capabilities, emerging markets, commodities, Latin America
JEL Classification: M1, M2
Suggested Citation: Suggested Citation