{"id":2434,"date":"2022-03-21T16:04:00","date_gmt":"2022-03-21T20:04:00","guid":{"rendered":"https:\/\/damore-mckim.northeastern.edu\/cem\/?post_type=dmsb_resource&p=2434"},"modified":"2024-07-24T16:05:29","modified_gmt":"2024-07-24T20:05:29","slug":"the-learning-race-between-old-and-new-multinationals","status":"publish","type":"dmsb_resource","link":"https:\/\/damore-mckim.northeastern.edu\/cem\/resources\/the-learning-race-between-old-and-new-multinationals\/","title":{"rendered":"The Learning Race Between Old and New Multinationals"},"content":{"rendered":"\n

This brief is part of the Insights @ Center for Emerging Markets<\/a>, a publication focused on cutting-edge ideas and advice for global leaders about emerging markets.<\/em><\/p>\n\n\n\n

By Ravi Ramamurti<\/a> (Northeastern University) and Peter J. Williamson (University of Cambridge)<\/strong><\/p>\n\n\n\n

New Vs. Old Multinationals<\/strong><\/h5>\n\n\n\n

New multinational corporations from emerging markets now offer stiff competition to the old multinationals from developed countries. Backed by local governments and utilizing low-cost production advantages, the new multinationals have sometimes successfully penetrated the developed markets of the US and Europe. Conversely, the old multinationals have found it difficult to beat the new multinationals in high-growth emerging markets, mainly because their products are too expensive or fail to appeal to the local populace.<\/p>\n\n\n\n

Filling \u201cCapability Holes\u201d<\/strong><\/h5>\n\n\n\n

New research<\/a> provides interesting insights into the nature of competition between these two generations of multinationals. The study puts forth the notion of \u201ccapability holes,\u201d which are competencies that a company needs, but lacks, to thrive in the high-growth markets of the future.<\/p>\n\n\n\n

The new multinationals typically possess ultra-low-cost production advantages, insights into the needs of emerging-market consumers, and ability to handle volatility, but lag behind the old multinationals in technology, branding, marketing and international experience.<\/p>\n\n\n\n

To fill these capability holes, the new multinationals must:<\/p>\n\n\n\n