Editor's note
Three of our five feature articles in this issue of Journal of Business Strategy focus on emerging markets and their growing impact on the developed world.
Two Israeli authors – experts in private branding – explore the recent introduction of store brands in emerging economies. As a prominent feature of the retail landscape in the more developed Western economies for about 30 years, store brands are just now proving their worth to newer economies. Soon consumers from Turkey to Turkmenistan will be buying “no-name”retail goods just as the more affluent consumers of the highly industrialized countries have done for several decades.
Not only goods but services will undergo major changes in emerging markets,or perhaps it is the markets that will change the goods and services. Any financial services institution that expects to be around in 2010 (less than three years away) and to be successful should already be shifting its strategic and operational approach to account for the strength of emerging economies. The changes forecast in Chris Gentle’s paper may not be surprising, but they are impacting strategy, products and services right now. The financial institution that is determined to prosper at the end of the decade and beyond must identify the necessary adjustments now and start implementing.
Andrew Inkpen and Kannan Ramaswamy, whose recent book, Global Strategy: Creating and Sustaining Advantage across Borders, integrates academic research with practical examples and case studies, suggest that the multinational as we know it today has already begun a transformation propelled in part by the emerging markets of India and China.
L. Greg Henley’s paper also deals with growth, but of a different kind from that encountered in developing countries. He describes his research on the investment partnerships between large firms and smaller enterprises that foster radical innovation. While innovation must occur within any large firm for it to continue to succeed, the corporate entrepreneurship opportunities with smaller firms offer different advantages. As the pressure to innovate continues, large firms will increasingly turn to this strategic option of investing in smaller firms. Global pharmaceutical companies have been investing for years now in small start-ups and other industries are following suit.
The continuing frequency of M&As is a testament to the optimism of investors and executives in the face of cautionary evidence. In their paper on the disappearing synergy of too many deals, the co-authors of “Where has all the synergy gone: the M&A puzzle,” contend that M&As can yield the hoped-for but seldom-achieved performance results if only the acquirers would do some things differently. These include using incentives more wisely,seizing the window of opportunity with more accuracy, and deploying the right people in key positions.
Nanci Healy
