Competitive Dynamics Between Multinational Companies and Local Rivals in Emerging Markets

Abstract

Multinational Companies from Emerging Economies (EMNCs) have become key players in the global economy. EMNCs have started to operate in highly dynamic, competitive environments where they are faced with competition from multinational companies (MNCs) from developed economies. This study applied Mutlu et al.’s (2015) awareness–motivation–capability (AMC) framework to the airline industry to investigate how EMNCs outperform MNCs. The development of each round of Mutlu et al.’s framework was tested using secondary data sources that cover 16 years, from 2001 to 2016. A fourth round, relating to the determination of ‘who will be the market leader’, was added to the framework and tested. The findings demonstrate that firms’ awareness and capabilities evolve in each round to develop the competitive advantages required to enhance their market position. The complex nature of competition requires firms to analyse information constantly to define key influential factors and to build essential capabilities and resources to initiate an action strategy quickly. From a managerial perspective, it is important for managers to build a comprehensive view of the competition and understand how this competition is evolving over time, to develop capabilities, pursue new opportunities and predict competitors’ responses.