The Rise to Market Leadership
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The Rise to Market Leadership

New Leading Firms from Emerging Countries

Edited by Franco Malerba, Sunil Mani and Pamela Adams

In recent years many new international market leaders from the BRICS countries have emerged in several manufacturing and service industries. This important study answers a number of crucial questions including, how did these companies rise up to become important players in their respective industries? What is the contribution of systemic and country specific factors? What is the role of internal firm factors in enabling these companies to become market leaders? The book presents evidence from companies in the automotive, pharmaceutical and ICT industries of China, India and Brazil.
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Chapter 8: Market leadership in Brazil’s ICT sector: the cases of Totvs and Positivo

Bruno César Araújo and Rodrigo Abdalla Filgueiras de Sousa

Abstract

This chapter examines the firm, sector and country factors that supported the emergence of two market leaders in specialized fields of the information and communications technology (ICT) sector in Brazil. The first company is Totvs, a software house dedicated to the Enterprise Resource Planning (ERP) segment. The second company is Positivo, a producer of personal computers (PCs), which emerged as a spin-off from a firm focused on educational services. In both cases, the characteristics of the national context have supported the emergence and consolidation of each company as a market leader. Notwithstanding that economies of scale and scope are essential sources of competitive advantage in the ICT sector in general, both cases exhibit a combination of two other factors that counterbalance their initial disadvantages with respect to their international competitors. First, government support has been crucial, although different policies were applied in these two cases: Totvs’s leading position has been reinforced by financial support from the Brazilian National Development Bank (BNDES), while Positivo has benefited from trade protectionism, under the ‘infant industry’ argument. Second, both companies have achieved market leadership through the development of customized products and solutions targeted to specific market segments that have not been properly addressed by world industry leaders. These strategies required the combination of strong technological and marketing capabilities. Recently, both companies have made efforts to enter the global market by focusing on countries with cultural, idiomatic and institutional similarities with Brazil.

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