Market Position as a Source of Competitive Advantage in Future Industry 6.0

Abstract

Historically, companies have struggled to understand the voids that characterise growth markets, such as a less stable political environment, complex business culture, and limited financing and availability of skilled labour, among others. They have often taken mature infrastructure foundations in developed markets for granted and are therefore caught off guard when they find these lagging in developing economies. In addition, companies also fail to distinguish between the nuanced differences in institutional voids between growth markets. China, for example, is characterised by issues such as limited availability of local managerial talent and a relatively underdeveloped capital markets system, while the Brazilian landscape faces supply chain bottlenecks, the influence of trade unions, and complex bureaucratic systems. On the other hand, companies looking to operate in the Russian market need to be aware of intellectual property risks and the need to establish local subsidiaries to raise capital. Companies have also been caught off guard by the rapid pace of evolution that characterises growth markets, creating new uncertainties in business conditions. Therefore, factors such as unpredictable regulatory and legal systems, nimble and innovative local competition and evolving tastes and quality expectations of the consumer, need careful consideration from multinationals looking to expand into these regions. On the other hand, many of the players operating locally in growth markets today are also looking to become the new-age multinationals of tomorrow, by expanding to new shores. These companies would need to understand the relevance and applicability of their home advantages beyond domestic borders, while repositioning themselves to tackle challenges such as limited brand awareness or supply chain gaps in new regions.

Research Objective: The research investigates on how domestic companies could make use of the relevance and applicability of their home advantages beyond domestic borders, while repositioning themselves to tackle challenges such as limited brand awareness or supply chain gaps in new regions.