Multinational Enterprises and Emerging Economies
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Multinational Enterprises and Emerging Economies

Klaus E. Meyer

Guided by the overarching question “how and why does the emerging economy context matter for business?”, this collection brings together key contributions of Klaus Meyer on multinational enterprises (MNEs) competing in, and originating from, emerging economies. The book also explores how outward investment strategies contribute to building internationally competitive MNEs.
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Chapter 10: Market Penetration and Acquisition Strategies for Emerging Economies

Klaus E. Meyer and Yen Thi Thu Tran

Abstract

Multinational enterprises (MNEs) are expanding their global reach, carrying their products and brands to new and diverse markets in emerging economies. As they tailor their strategies to the local context, they have to create product and brand portfolios that match their competences with local needs. A multi-tier strategy with local and/or global brands may provide MNEs with the widest reach into the market and the potential for market leadership. However, it has to be supported with an appropriate combination of global and local resources. Foreign entrants therefore have to develop operational capabilities for the specific context, which requires complementary resources that are typically controlled by local firms. As institutional obstacles and weaknesses of local firms often inhibit the direct acquisitions, foreign investors may pursue unconventional strategies to acquire local resources. We outline the strategies for penetrating local markets through multi-tier branding and the acquisition of local firms, and offer new typologies that describe staged, multiple, indirect, or brownfield acquisitions. We illustrate them by analysing the entry and growth of Carlsberg Breweries in four very different emerging economies: Poland, Lithuania, Vietnam and China.

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