Theory, Evidence and Implications
Edited by Phillip H. Phan, Sankaran Venkataraman and S. Ramakrishna Velamuri
Chapter 9: The Entrepreneurial Role of Border Traders in Laos and Thailand
Edward Rubesch INTRODUCTION Prahalad (2005) suggests there is a ‘fortune at the bottom of the pyramid’ for ﬁrms who can reach the market comprised of the 4 billion people living in developing countries on less than US$ 2 per day. Indeed, many multinational ﬁrms face stagnant sales in mature markets, and supplying products to emerging markets in developing countries represents the largest potential for future sales growth (Czinkota and Ronkainen, 1997). However, while ﬁrms recognize the potential of emerging markets in developing countries, these markets also present many challenges. Distribution infrastructure is often limited (Arnold and Quelch, 1998). At the same time, using intermediaries can be risky as ﬁrms are uncertain about how well their distributors will honor agreements, or it may be diﬃcult to monitor channel partners to ensure they are not also participating in gray marketing or counterfeiting of the ﬁrm’s branded products (Li, 2003). Emerging markets often have underdeveloped legal systems, with inconsistent law enforcement. Government oﬃcials may participate in illegal activities to such an extent that those activities become accepted as ‘normal’, and engaging in such activities may, in fact, be a requirement in order to do business (Reid et al., 2001). According to Prahalad (2005), ‘entrepreneurship on a massive scale is the key’ (p. 2) to overcoming barriers to doing business and unlocking the potential of emerging markets in developing countries. This research investigates the activities of one type of entrepreneur who operates in an emerging market: traders on the Thailand-Laos border who...
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