How emerging market brands will go global
Nirmalya Kumar and Jan- Benedict E.M. Steenkamp; Palgrave Macmillan, 256pp.
What happens when companies in the developing world decide supplying low- cost commodities to big first- world brands is a mug’s game? We are about to find out as Asian organisations start moving up the food chain. Kumar and Steenkamp explain how these companies will do it, mapping out eight ways to go global. Many of the businesses expanding out of their home market are Chinese companies, which are using their massive cashflow to buy a stall in the capitalist bazaar. How they will fare when they have to outsmart, rather than buy, businesses is the question. Although the answer is obvious for one of the largest categories, the national champion route. Yes, the authors argue, the model can work, citing Emirates (though not the mass of national flag carriers that are no more). However, it generally doesn’t, as demonstrated by Malaysia’s dismal national car project, the Proton. That France once cited yoghurt as a strategic national resource demonstrates what happens when governments get into business.