The New Emerging Market Multinationals challenges assumptions for disrupting markets and examines strategies for building brands in emerging economies. The authors of the book are senior academics from INSEAD, University of Michigan, and Koç University, and their insights are both rigorous and practical. David Aaker, Professor Emeritus at the University of California, Berkeley’s Haas School of Business, notes on the back cover of the book, “This is the future of global competition. You need to understand it if you aspire to be a player or if global markets are now a part of your strategy”.
The book is organized into nine chapters that focus on choosing consumer segments and expanding internationally; strategic competency building; international expansion through acquisitions; brand-building strategies; building brand awareness on limited budgets; building perceptions of high quality, leadership and trust; global brand associations architecture; managing a global or regional brand; and key takeaways.
The first chapter of the book provides a solid foundation as it walks the reader through how to effectively choose consumer segments when entering international markets. In particular, the authors believe “the choice of which segment to target should come before considering which markets to enter” (p. 28). Once consumer segments have been identified, the firm then needs to make its decision on country choice based on the factors of market size, geographic centrality and growth opportunities. The authors note that, “Firms need not only to choose segments to target and countries to enter, but also to prioritize future expansion across segments and markets, in line with the resources and capabilities of the firm” (p. 53).
It is helpful for readers of this book to be familiar with Michael Porter’s Competitive Strategy, as the authors’ premise is centered around four types of strategies for emerging market multinational companies (EMNCs). The first and second types of strategies, cost leaders and knowledge leveragers, reflect traditional emerging market capabilities that such firms are naturally expected to possess and use. The third and fourth types of strategies, niche customizers and global brand builders, reflect those EMNCs developing significant new capabilities that are unique to a particular firm.
The second chapter of the book outlines the importance of building competencies relative to technologies, products, processes and business models for each of the four recommended strategies. The authors argue that many EMNCs are not just competing on the basis of low-cost manufacturing advantages, but are also developing new capabilities to include technological leadership, innovative processes/products and the ability to understand consumer needs.
The bulk of the book is dedicated to brand development, and the fourth chapter outlines a road map for building strong challenger brands. In particular, the authors reveal that EMNCs often utilize a two-phase strategy that involves a strategy of low-price brands first (e.g. market entry through original equipment manufacturers or private label brands) and then the addition of own-built or acquired higher-end brands. Given the high investment required in brand development, the authors caution that, “EMNCs have to carefully plan for, and accumulate, the financial and management resources they will need when they make a serious effort to build (or buy) regional or global brands” (p. 154).
The book is filled with the names of dozens of international brands and for the uninitiated it can feel overwhelming at times. However, an appendix provides a brief description of each company that is mentioned. The companies featured in the book are representative of the expertise and connections of the authors and tend to skew heavily toward India and Turkey.
The final chapter of the book is an excellent overview of key takeaways. The chapter provides a summary of the four strategy types and shares thoughts on which ones are most likely to be sustainable for EMNCs over the long-term. In addition, the authors examine broader macroeconomic issues that could impact the severity and rapidity of the growth of EMNCs in the future to include the potential for a negative country-of-origin image and the challenges of viable research and development.
There is a well-designed companion site for the book available at www.emergingmarketmultinationals.com (although it has not been updated since the end of 2012). As a resource for academic courses, this book would be well suited for a senior-level marketing capstone course at the undergraduate level or an MBA level course. The book includes various figures and graphics that serve as useful guides to reinforce its lessons.
The New Emerging Market Multinationals is reminiscent of Tom Peters’ In Search of Excellence. However, rather than merely sharing themes for success as Peters did, these authors have undertaken the challenge of explaining how to develop strategies that build global brands. Peters' book is perhaps a simpler read, but this book is a critical read for both academics seeking to understand brand-building strategies in emerging markets and practitioners seeking to extend their market reach.
