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Rivalry between emerging-market MNEs and developed-country MNEs: Capability holes and the race to the future

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  • Ramamurti, Ravi
  • Williamson, Peter J.

Abstract

The rise of emerging-market MNEs (EMNEs) often is characterized as a process by which they catch up with the superior resources and capabilities of incumbent, developed-country MNEs (DMNEs). We argue that this characterization needs to be rethought as the requirements for competitive success in global markets are changing. Emerging markets are becoming more important, the value-for-money segment in developed countries is expanding, global retailers are gaining leverage, and the flexibility to deal with economic and political volatility is becoming a key organizational capability. Typically, EMNEs are stronger in these areas than DMNEs. This leads us to frame the competition between EMNEs and DMNEs as a race to the future in which each type of firm has capability holes that it needs to fill in order to thrive in the global economy of the future. We then discuss the strategies that EMNEs and DMNEs have been using to plug their respective capability holes. We hope future studies can apply this framework to analyze rivalry between EMNEs and DMNE in specific industries.

Suggested Citation

  • Ramamurti, Ravi & Williamson, Peter J., 2019. "Rivalry between emerging-market MNEs and developed-country MNEs: Capability holes and the race to the future," Business Horizons, Elsevier, vol. 62(2), pages 157-169.
    • Handle: RePEc:eee:bushor:v:62:y:2019:i:2:p:157-169
    DOI: 10.1016/j.bushor.2018.11.001
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