Prelims

doi:10.1108/978-1-78743-355-720181009

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Strategic Management in Emerging Markets: Aligning Business and Corporate Strategy

Author and Other Information

Krassimir Todorov

University of Finance, Business and Entrepreneurship (VUZF), Bulgaria

Yusaf H. Akbar

Central European University, Hungary

Emerald Publishing Limited

DOI:

https://doi.org/10.1108/9781787433557

ISBN electronic:

978-1-78743-355-7

ISBN print:

978-1-78754-166-5

Publication date:

2018

Book Chapter

Prelims

Author and Other Information

2019

Emerald Publishing Limited

Doi:

https://doi.org/10.1108/978-1-78743-355-720181009

Published:

2018

2019

Emerald Publishing Limited

Half Title Page

STRATEGIC MANAGEMENT IN EMERGING MARKETS

Title Page

STRATEGIC MANAGEMENT IN EMERGING MARKETS

Aligning Business and Corporate Strategy

EDITED BY

KRASSIMIR TODOROV

University of Finance, Business and Entrepreneurship (VUZF), Bulgaria

YUSAF H. AKBAR

Central European University, Hungary

United Kingdom – North America – Japan – India – Malaysia – China

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Emerald Publishing Limited

Howard House, Wagon Lane, Bingley BD16 1WA, UK

First edition 2019

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List of Figures

Chapter 1

Figure 1.1.

Countries by GDP (PPP) in 2015.

Figure 1.2.

Human Development Index, 2015–2016.

Figure 1.3.

World Economic Pyramid in USD per Capita/Year and Population in Millions.

Chapter 2

Figure 2.1.

Hannibal’s Route of Invasion given by the Department of History, United States Military Academy.

Figure 2.2.

Military Command Hierarchy.

Figure 2.3.

Sample of a Management Structure.

Figure 2.4.

Sample of Commands and Administrative Ranks.

Figure 2.5.

Evolution of Strategic Management: Dominant Themes.

Chapter 3

Figure 3.1.

Organizing Framework.

110

Figure 3.2.

Drucker’s Strategic Thinking Approach, Developed by W. Swain (2003).

123

Figure 3.3.

Corporate Versus Business Strategy.

128

Figure 3.4.

The Strategy Development Process Works Mainly on SBU Level.

130

Figure 3.5.

Strategic Theory Architecture.

130

Figure 3.6.

Strategy and Management Hierarchy.

131

Figure 3.7.

Strategy Versus Business Model.

133

Figure 3.8.

Environment–Strategy–Structure–Operations (ESSO) Business Model Development.

134

Figure CS3.1.

Etihad Rail Map.

143

Figure CS3.2.

GCC Rail Map.

143

Chapter 4

Figure 4.1

The Boston Consulting Group Portfolio Matrix.

165

Figure 4.2

The Relationship between Traditional “Strengths–Weaknesses–Opportunities–Threats” Analysis, the Resource-based Model and Models of Industry Analysis.

170

Figure 4.3

The Basic Framework: Strategy as a Link between the Firm and its Environment.

171

Figure 4.4

Navigation System, Six Measurement Categories for Health.

173

Figure 4.5

Seven Leading Historical Models of Strategy.

173

Figure 4.6

The 3 C’s Model.

175

Figure 4.7

The Five Forces That Shape the Industry Competition.

175

Figure 4.8

7 S’s Model.

177

Figure 4.9

The 3 S’s “Single Shot Strategy“ Model Examples.

178

Figure 4.10

The Eight Strategic Laws of Gravity Model.

179

Figure 4.11

The 9 S’s Model.

181

Figure 4.12

The 7 C’s + Results Model.

182

Figure 4.13

Porter’s Five Forces Model for Analyzing an Industry’s Structure.

188

Figure 4.14

Barriers and Profitability.

190

Figure 4.15

Industry Structure and Environmental Opportunities.

194

Chapter 5

Figure 5.1

Supply Chain Structure.

227

Figure 5.2

Four Nonprice Competitive Strategies.

231

Figure 5.3

Types of Strategic Alliances.

242

Figure 5.4

The Spectrum of Alliances.

242

Figure 5.5

Acquisition Process.

247

Figure 5.6

Four Basic Strategies.

253

Figure 5.7

Changes Over Time.

254

Figure CS5.1.

Thailand’s Wine Importation and Distribution Process.

264

Chapter 6

Figure 6.1

The Structure–Conduct–Performance Model.

284

Figure 6.2

MBV and RBV Paradigms.

285

Figure 6.3

The S-C-P Paradigm from the Field of Industrial Economics.

287

Figure 6.4

The Grand Strategy Matrix.

287

Figure 6.5

The Relationship between Resource Heterogeneity and Immobility, Value, Rareness, Imperfect Imitability, Substitutability and Sustained Competitive Advantage.

295

Figure 6.6

The SPAcE Matrix.

296

Figure 6.7

Key Constructs.

301

Figure 6.8

Desired Characteristics of the Firm’s Resources and Capabilities.

302

Chapter 7

Figure 7.1

Three Generic Strategies.

346

Figure 7.2

Porter’s Five Generic Strategies.

347

Figure 7.3

Simultaneous Implementation, Being Stuck in the Middle.

364

Figure 7.4

The Simultaneous Pursuit of Differentiation and Low Cost.

365

Figure CS7.1

Business Model for Physical/Scratch Card Airtime Distribution.

376

Figure CS7.2

Flow of e-Pay Electronic Airtime Reload Process, from Telcos to Customers.

376

Figure CS7.3

e-Pay Malaysia Businesses, up to Early 2008.

379

Figure CS7.4

e-Pay Pos-terminal System Platform, Mid-2010.

Chapter 8

Figure 8.1

The Transformation from Old to New Business Models.

397

Figure 8.2

The Elements of a Successful Business Model.

401

Figure 8.3

A Business Model Typically Consists of Six Components.

401

Figure 8.4

Business Model Definition – The Magic Triangle.

403

Figure 8.5

Business Model Canvas Template.

404

Figure 8.6

Frames of Reference for Considering Strategic Options.

407

Figure 8.7

The Funnel-shaped Strategy Development Process.

408

Figure 8.8

Priority Framework.

408

Figure CS8.9.

Relationships between Views about Named Country and Wine Frequency Consumption.

436

Chapter 1
Figure 1.1.	Countries by GDP (PPP) in 2015.	5
Figure 1.2.	Human Development Index, 2015–2016.	10
Figure 1.3.	World Economic Pyramid in USD per Capita/Year and Population in Millions.	12
Chapter 2
Figure 2.1.	Hannibal’s Route of Invasion given by the Department of History, United States Military Academy.	49
Figure 2.2.	Military Command Hierarchy.	54
Figure 2.3.	Sample of a Management Structure.	54
Figure 2.4.	Sample of Commands and Administrative Ranks.	55
Figure 2.5.	Evolution of Strategic Management: Dominant Themes.	61
Chapter 3
Figure 3.1.	Organizing Framework.	110
Figure 3.2.	Drucker’s Strategic Thinking Approach, Developed by W. Swain (2003).	123
Figure 3.3.	Corporate Versus Business Strategy.	128
Figure 3.4.	The Strategy Development Process Works Mainly on SBU Level.	130
Figure 3.5.	Strategic Theory Architecture.	130
Figure 3.6.	Strategy and Management Hierarchy.	131
Figure 3.7.	Strategy Versus Business Model.	133
Figure 3.8.	Environment–Strategy–Structure–Operations (ESSO) Business Model Development.	134
Figure CS3.1.	Etihad Rail Map.	143
Figure CS3.2.	GCC Rail Map.	143
Chapter 4
Figure 4.1	The Boston Consulting Group Portfolio Matrix.	165
Figure 4.2	The Relationship between Traditional “Strengths–Weaknesses–Opportunities–Threats” Analysis, the Resource-based Model and Models of Industry Analysis.	170
Figure 4.3	The Basic Framework: Strategy as a Link between the Firm and its Environment.	171
Figure 4.4	Navigation System, Six Measurement Categories for Health.	173
Figure 4.5	Seven Leading Historical Models of Strategy.	173
Figure 4.6	The 3 C’s Model.	175
Figure 4.7	The Five Forces That Shape the Industry Competition.	175
Figure 4.8	7 S’s Model.	177
Figure 4.9	The 3 S’s “Single Shot Strategy“ Model Examples.	178
Figure 4.10	The Eight Strategic Laws of Gravity Model.	179
Figure 4.11	The 9 S’s Model.	181
Figure 4.12	The 7 C’s + Results Model.	182
Figure 4.13	Porter’s Five Forces Model for Analyzing an Industry’s Structure.	188
Figure 4.14	Barriers and Profitability.	190
Figure 4.15	Industry Structure and Environmental Opportunities.	194
Chapter 5
Figure 5.1	Supply Chain Structure.	227
Figure 5.2	Four Nonprice Competitive Strategies.	231
Figure 5.3	Types of Strategic Alliances.	242
Figure 5.4	The Spectrum of Alliances.	242
Figure 5.5	Acquisition Process.	247
Figure 5.6	Four Basic Strategies.	253
Figure 5.7	Changes Over Time.	254
Figure CS5.1.	Thailand’s Wine Importation and Distribution Process.	264
Chapter 6
Figure 6.1	The Structure–Conduct–Performance Model.	284
Figure 6.2	MBV and RBV Paradigms.	285
Figure 6.3	The S-C-P Paradigm from the Field of Industrial Economics.	287
Figure 6.4	The Grand Strategy Matrix.	287
Figure 6.5	The Relationship between Resource Heterogeneity and Immobility, Value, Rareness, Imperfect Imitability, Substitutability and Sustained Competitive Advantage.	295
Figure 6.6	The SPAcE Matrix.	296
Figure 6.7	Key Constructs.	301
Figure 6.8	Desired Characteristics of the Firm’s Resources and Capabilities.	302
Chapter 7
Figure 7.1	Three Generic Strategies.	346
Figure 7.2	Porter’s Five Generic Strategies.	347
Figure 7.3	Simultaneous Implementation, Being Stuck in the Middle.	364
Figure 7.4	The Simultaneous Pursuit of Differentiation and Low Cost.	365
Figure CS7.1	Business Model for Physical/Scratch Card Airtime Distribution.	376
Figure CS7.2	Flow of e-Pay Electronic Airtime Reload Process, from Telcos to Customers.	376
Figure CS7.3	e-Pay Malaysia Businesses, up to Early 2008.	379
Figure CS7.4	e-Pay Pos-terminal System Platform, Mid-2010.
Chapter 8
Figure 8.1	The Transformation from Old to New Business Models.	397
Figure 8.2	The Elements of a Successful Business Model.	401
Figure 8.3	A Business Model Typically Consists of Six Components.	401
Figure 8.4	Business Model Definition – The Magic Triangle.	403
Figure 8.5	Business Model Canvas Template.	404
Figure 8.6	Frames of Reference for Considering Strategic Options.	407
Figure 8.7	The Funnel-shaped Strategy Development Process.	408
Figure 8.8	Priority Framework.	408
Figure CS8.9.	Relationships between Views about Named Country and Wine Frequency Consumption.	436

List of Tables

Chapter 2
Table 2.1.	Basic Military Strategies Still Valid to this Day in Management.	47
Table 2.2.	Evaluation of Hannibal’s Strategic Planning.	48
Table 2.3.	The Concept of Strategy in Business – An Overview.	50
Table 2.4.	Strategy, Operations, and Tactics.	53
Table 2.5.	Schools of Strategic Thought (Traditional).	62
Table 2.6.	Schools of Strategic Thought (Contemporary).	63
Table 2.7.	Traditional Schools.	66
Table 2.8.	Contemporary Schools.	68
Chapter 3
Table 3.1.	Core Purpose is a Company’s Reason for Being.	115
Table 3.2.	Examples of Vision from Some Multinational Companies.	116
Table 3.3.	Core Values are a Company’s Essential Tenets.	119
Table 3.4.	Examples of Company’s Strategic Objectives.	121
Table 3.5.	Strategic Pillars.	124
Table 3.6.	Criteria for the Definition of Strategic Business Units (SBUs).	129
Table CS3.1.	STEAM Model.	140
Table CS3.2.	Etihad Rail Network.	142
Table CS3.3.	Etihad Rail Strategic Plan, 2014–2016.	147
Table CS3.4.	Strategic Insight on the GCC Rail Sector.	149
Table CS3.5.	Strategic Partnership.	151
Chapter 4
Table 4.1	The Product/Market Matrix.	164
Table 4.2	SWOT Analysis as Shown in Mueller-Stewens/Lechner (2005).	169
Chapter 5
Table 5.1	Levels and Types of Diversification.	235
Table 5.2	The Competitive Implications of Different Economies of Scope.	237
Table 5.3	Merger and Acquisitions.	249
Table 5.4	Global Strategy: An Organizing Framework.	256
Table 5.5	Measuring the Impact of Distance.	257
Table CS5.1.	Thailand Wine Industry Key Players (as of 2006).	267
Table CS5.2.	Sample Calculation of Thailand’s Duties Levied on Imported Wine.	270
Table CS5.3.	Reasons for Drinking Wine Regularly/Occasionally.	273
Table CS5.4.	Percentage of Wine by Origins Carried by Supermarkets (2006).	274
Chapter 6
Table 6.1	Types of Resources and Capabilities.	291
Table 6.2	Two Concepts of the Corporation: SBU and Core Competence.	294
Table 6.3	Example Factors that Make Up the SPAcE Matrix Axes.	297
Table 6.4	Comparing the MBV, RBV, and Simple Rules Approach.	299
Table 6.5	Paradigms of Strategy: Salient Characteristics.	303
Table 6.6	Megatrends, Economic Trends, and Turbulence Factors.	312
Table CS6.1	Sainsbury’s Group Profit and Loss Account (in £m)	318
Table CS6.2	The Top 15 Grocery Retailers (2002)	320
Table CS6.3	Egypt – Economic Data	321
Table CS6.4	Food affordability in Egypt	322
Table CS6.5	Food expenditures in Egypt	324
Table CS6.6	Number of retail food outlets and Sainsbury’s major competitors (1999)	326
Table CS6.7
Chapter 7
Table 7.1	Organizing to Realize the Full Potential of Cost Leadership Strategies.	350
Table 7.2	Ways Firms can Differentiate Their Products.	352
Table 7.3	Organizing to Implement Product Differentiation Strategies.	354
Table 7.4	The Organizational Requirements for implementing Cost leadership and Product Differentiation Strategies.	359
Table 7.5	Generic Competitive Strategies.	360
Table E1	e-Pay Malaysia, company formation and development.	373
Chapter 8
Table 8.1	Red Ocean Versus Blue Ocean Strategy.	396
Table 8.2	The Six Leadership Styles at a Glance.	416
Table CS8.I	World Wine Consumption Total and per Capita.	422
Table CS8.2	World Wine Production.	424
Table CS8.3	Primary Wine Exporting Countries.	425
Table CS8.4	Evolution of Exports	432
Table CS8.5.	Relevant Variables at Time of Wine Purchase	434
Table CS8.6	Country Affinity	435

Chapter 2
Table 2.1.	Basic Military Strategies Still Valid to this Day in Management.	47
Table 2.2.	Evaluation of Hannibal’s Strategic Planning.	48
Table 2.3.	The Concept of Strategy in Business – An Overview.	50
Table 2.4.	Strategy, Operations, and Tactics.	53
Table 2.5.	Schools of Strategic Thought (Traditional).	62
Table 2.6.	Schools of Strategic Thought (Contemporary).	63
Table 2.7.	Traditional Schools.	66
Table 2.8.	Contemporary Schools.	68
Chapter 3
Table 3.1.	Core Purpose is a Company’s Reason for Being.	115
Table 3.2.	Examples of Vision from Some Multinational Companies.	116
Table 3.3.	Core Values are a Company’s Essential Tenets.	119
Table 3.4.	Examples of Company’s Strategic Objectives.	121
Table 3.5.	Strategic Pillars.	124
Table 3.6.	Criteria for the Definition of Strategic Business Units (SBUs).	129
Table CS3.1.	STEAM Model.	140
Table CS3.2.	Etihad Rail Network.	142
Table CS3.3.	Etihad Rail Strategic Plan, 2014–2016.	147
Table CS3.4.	Strategic Insight on the GCC Rail Sector.	149
Table CS3.5.	Strategic Partnership.	151
Chapter 4
Table 4.1	The Product/Market Matrix.	164
Table 4.2	SWOT Analysis as Shown in Mueller-Stewens/Lechner (2005).	169
Chapter 5
Table 5.1	Levels and Types of Diversification.	235
Table 5.2	The Competitive Implications of Different Economies of Scope.	237
Table 5.3	Merger and Acquisitions.	249
Table 5.4	Global Strategy: An Organizing Framework.	256
Table 5.5	Measuring the Impact of Distance.	257
Table CS5.1.	Thailand Wine Industry Key Players (as of 2006).	267
Table CS5.2.	Sample Calculation of Thailand’s Duties Levied on Imported Wine.	270
Table CS5.3.	Reasons for Drinking Wine Regularly/Occasionally.	273
Table CS5.4.	Percentage of Wine by Origins Carried by Supermarkets (2006).	274
Chapter 6
Table 6.1	Types of Resources and Capabilities.	291
Table 6.2	Two Concepts of the Corporation: SBU and Core Competence.	294
Table 6.3	Example Factors that Make Up the SPAcE Matrix Axes.	297
Table 6.4	Comparing the MBV, RBV, and Simple Rules Approach.	299
Table 6.5	Paradigms of Strategy: Salient Characteristics.	303
Table 6.6	Megatrends, Economic Trends, and Turbulence Factors.	312
Table CS6.1	Sainsbury’s Group Profit and Loss Account (in £m)	318
Table CS6.2	The Top 15 Grocery Retailers (2002)	320
Table CS6.3	Egypt – Economic Data	321
Table CS6.4	Food affordability in Egypt	322
Table CS6.5	Food expenditures in Egypt	324
Table CS6.6	Number of retail food outlets and Sainsbury’s major competitors (1999)	326
Table CS6.7
Chapter 7
Table 7.1	Organizing to Realize the Full Potential of Cost Leadership Strategies.	350
Table 7.2	Ways Firms can Differentiate Their Products.	352
Table 7.3	Organizing to Implement Product Differentiation Strategies.	354
Table 7.4	The Organizational Requirements for implementing Cost leadership and Product Differentiation Strategies.	359
Table 7.5	Generic Competitive Strategies.	360
Table E1	e-Pay Malaysia, company formation and development.	373
Chapter 8
Table 8.1	Red Ocean Versus Blue Ocean Strategy.	396
Table 8.2	The Six Leadership Styles at a Glance.	416
Table CS8.I	World Wine Consumption Total and per Capita.	422
Table CS8.2	World Wine Production.	424
Table CS8.3	Primary Wine Exporting Countries.	425
Table CS8.4	Evolution of Exports	432
Table CS8.5.	Relevant Variables at Time of Wine Purchase	434
Table CS8.6	Country Affinity	435

List of Abbreviations

BDT

Behavioral Decision Theory

BMI

Business Model Innovation

CBU

Strategic Business Unit

Competitive Position

CEO

Chief Executive Officer

CVP

Customer Value Proposition

GDP

Gross Domestic Product

Economic Profit

ESSO

Environment–Strategy–Structure–Operations

Financial Position

FTSE

Financial Times Stock Exchange

Intelligence Quotient

Industry Position

QSPM

Qualitative Strategic Planning Matrix

Human Resource

M&A

Merger and Acquisition

MBA

Master of Business Administration

MBV

Market Based View

OEM

Original Equipment Manufacturer

R&D

Research and Development

RBV

Resource Based View

ROCE

Return on Capital Employed

S-C-P

Structure–Conduct–Performance

SIF

Strategic Industry Factors

Stability Position

SPACE

Strategic Position and Action Evaluation

SWOT

Strengths, Weaknesses, Opportunities, and Threats

Strengths–Opportunities Strategies

Strengths–Threats Strategies

Weaknesses–Opportunities Strategies

Weaknesses–Threats Strategies

UAP

Unique Advertising Proposition

USP

Unique Selling Proposition

About the Authors

Yusaf H. Akbar is an Associate Professor in Management at Central European University. With extensive teaching, research, and consulting experience in emerging markets (currently engaged in consulting and executive education in Bulgaria, China, Hungary, Latvia, Lithuania, Morocco, Poland, Russia, and Ukraine), Yusaf’s current research interests are focused on three topics: (1) the internationalization capabilities of SMEs into emerging markets; (2) nonmarket strategies of multinational firms, and (3) strategic impacts of the sharing economy. His current roles in the academy and beyond include founding editor of the International Journal of Emerging Markets and an advisor to governmental authorities. He completed visiting researcher positions at University of Trieste and the Wirtschaftsuniversiteit in Vienna in 2013. His consulting and professional references include Citibank, Deutsche Telekom, Siemens, Telenor, Texas Instruments, and Toyota. He is an active advisory board member to several emerging market start-up firms. Recent awards and significant projects include a research fellowship at the Institute for Advanced Studies in Budapest, Hungary. His teaching experience includes extensive teaching and executive education experience in more than 15 worldwide. He has published in peer-reviewed journals, including Journal of International Management, Journal of World Business, Cross-Cultural Management and Strategy, International Journal of Hospitality Management, Global Governance, Global Business and Organizational Excellence, Harvard Business Review, International Business Review, Thunderbird International Business Review, Journal of Air Transport Management, and World Competition. He has published two books, the first entitled EU Enlargement and Central Europe: Regulatory Convergence and the Multinational Enterprise (Palgrave, 2013) and another volume, Global Antitrust: Trade and Competition Linkages (CRC Press, 2003). He is co-editor (with Rustam Jamilov) of a book entitled Neo-Transition Economics (Emerald Publishing, 2015). He has served as an editorial advisory board member on the following journals: Thunderbird International Business Review, Journal of Asia-Pacific Business, and the European Journal of International Management. He has authored or co-authored numerous business case studies of both large and smaller entrepreneurial firms including BMB, ING Insurance, Datwyler, Philips, Smollan Group, Vendedy, Vienna International Airport, Zwack Unicum, and Hummus Bar.

Krassimir Todorov is an Associate Professor in Strategic Management and Business Modeling at University of Finance, Business and Entrepreneurship (VUZF), Sofia, Bulgaria. He holds a professional MBA degree in the field of Strategic Management from the Executive Academy of Vienna University of Economics and Business, Austria (2014–2016). As an International Residency Program, he completed a specialization in Mergers and Acquisitions in the Carlson School of Management, University of Minnesota, Minneapolis, USA. Additionally, he holds a PhD degree in Management Accounting from the University of National and World Economy, Sofia, Bulgaria, where he led classes in accounting, finance, and controlling (2001–2005).

Krassimir Todorov has been working for 12 years in two Bulgarian subsidiaries of Inchcape Plc, London (FTSE 250) – Toyota Balkans and TM Auto – authorized distributor and retailer of Toyota and Lexus (2002–2014). He has occupied various senior executive positions – Finance Director, Sales and Dealer Development Director and General Manager. During his work he has been involved in various international investments projects in Russia, Georgia, Azerbaijan, Romania, Macedonia, and Poland. Currently, Dr Todorov is working as a country manager in Bulgaria for the international company FCC Environment, headquartered in Vienna, Austria, part of the Spain group Fomento de Construcciones y Contratas (FCC), specialized in construction of large infrastructure projects (in Canada, US, Mexico, Brazil, Colombia, Chile, Peru, Panama, Costa Rica, Saudi Arabia, Qatar, and so on), as well as projects in the area of waste management (US, UK, and Central and Eastern Europe).

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List of Abbreviations

About the Authors

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