How Can MNCs In Emerging Economies Establish Competitive Advantage In Developed Countries

According to the classic international business theory,the unique competitive advantages of enterprises in technology,brand or management practice are regarded as the necessary conditions for the emergence of multinational corporations(MNCs).However,the internationalization of Huawei,Lenovo and Haier seems to challenge this view.These multinationals from emerging economies have been generally considered to lack advantages,but they have successfully competed in the international market and even in the markets of developed countries.In order to explain this phenomenon,scholars have re explored the competitive advantages of transnational corporations in emerging economies.Scholars who pay attention to the development of enterprises’ own advantages believe that transnational corporations in emerging economies do have some special capabilities or advantages,while other scholars have discussed that transnational corporations can acquire strategic assets from developed countries through mergers and acquisitions to quickly establish competitive advantages.Both types of research have their limitations.For example,the former does not explain the source and formation process of competitive advantage,nor can it explain the continuous expansion of transnational corporations in emerging economies,while the latter focuses on strategic assets,it is not clear how the strategic assets play a role in enhancing the competitive advantage of transnational corporations.The separation of internal development and external acquisition discussion also blurs the whole process of competitive advantage formation.The composition-based view and the springboard theory are the typical representative theories of the above two types of research respectively.In order to comprehensively understand the trajectory of MNCs in emerging economies establishing and improving their competitive advantage in developed countries,this study will introduce these two theories as the basis for the construction of this model.According to the composition-based view,this paper attributes the competitive advantage of MNCs in emerging economies to the creative integration of common resources,which is embodied in the collection of a variety of competitive means to enhance the competitiveness of products.The springboard can make up for the resource disadvantage based on the integration of common resources,so as to improve its competitive advantage.This study builds a link bridge between two typical theories based on the generation logic of resource capability competitive advantage,and examines the mechanism and process of internal common resources and external strategic assets playing a role and interacting to form and improve competitive advantage.Through an in-depth case analysis,this paper first clarifies the ability combination that constitutes the composed competitive advantage and the resource connotation of its forming ability,and then reveals the black box of how the strategic assets obtained by the springboard action enhance these ability combinations to improve the competitive advantage.According to the research questions,we determine the selection criteria of sample enterprises.As a typical emerging economy,China’s development and changes have attracted the most attention.Therefore,this study limits the selection of sample enterprises to China.The screening scope is the top 500 enterprises in China’s foreign trade in 2020 released by the China Institute of foreign economic and trade statistics.The screening method is to read the annual report of enterprises and web information one by one.Considering the typicality of the research and the availability of data,this paper finally selects Shenzhen Mindray Biomedical Electronics Co.,Ltd.,a leading enterprise in the field of medical devices,as the case sample of this study.The dynamic evolution framework of the combination of Composition-based view and springboard theory proposed in this study explains the path and process mechanism of MNCs in emerging economies to establish competitive advantage in developed countries.First,MNCs in emerging economies can generate capability advantages in process and cost innovation,quality management,market perception,marketing and technical capabilities by creatively integrating existing common resources,and combine these capabilities,MNCs can enter the marginal markets of developed countries by means of a variety of competitive means(such as low price,high quality,adaptive improvement of products and ingenious Marketing).Then they seek strategic assets through springboard action to make up for the lack of integration based on general resources and capabilities.The integration of more advantageous resources can upgrade their capability combination and improve their competitive advantage.After repeated experiments,MNCs have accumulated rich experience in international R&D and market management,and can better manage resources.They also learn cutting-edge technologies by embedding into global R&D networks.The re-integration of constantly evolving and updated resources has further upgraded the capabilities of multinational corporations.The re-combination of these capabilities will produce sustainable competitive advantages,which will be reflected in the collection of richer and more effective competitive means(such as low price,high quality,product innovation and design,commercialization speed advantage,strong distribution and service support,network advantage).This study enriches the relevant research on the internationalization of MNCs in emerging economies and provides a reference for managers on how to establish competitive advantage in the markets of developed countries.