Globalization is a double-edged sword, smart local companies have used the benefits of globalization to close gaps in technology, capital, and talent with their rivals from the developed world. Local firms act strategically in order to keep the multinational out of the competition, this attempts the local companies to capitalize the local presence & the command over the cultural & economical environment in their home country. In this paper we will try to highlight on the fact that local firms can compete successfully to MNC with close to Kingfisher & Haier as examples.
Regional firms are at sword when there is influx of MNC’s into the market, this when taken as a positive element creates a Glocal firm (Lecture-note of Chung L) which is competitive enough in providing international standards with a local touch similar to those of transnational companies. This development was depicted by companies like Haier & Kingfisher in China & India respectively. Both these companies are today’s dominant giant firms in their respective fields. These companies used the cultural approach in understanding at grass-root level the local consumer & the society’s psychology collectively. Firms located locally do harness the human capital market extensively in order to be competitive & also be strong at one parameter during contingency. Companies do try to obtain intellectual rights over any new technological improvement which is credit to their R&D.
Local giants do have a strong framework in institutional characteristics, companies like Haier & Kingfisher have political capital, which leads to protecting the local firm against the international MNC’s. Competing in emerging markets for MNC’s is difficult due to the unstable political scenario which these countries pose. Divergent policies with close reference to India is difficult to manage due to its norms which vary from individual state, hence making a MNC compete or enter in 29 different states with different culture & societal norms as well as different pricing structure. Favorable finance option to the local firms due to its long history & trust created, act as a catalyst in case of any contingency which the companies come across.
Strategic decision in any organization contributes to a large extent in forming the organization image in the market. Local organizations are more in defending the market, on the other hand MNC’s are more into penetrating into market scope. Bajaj defended its position in the market when a MNC Honda tried to enter into the market (Competing with Giants), although the approach was pro-active with advantage of the intensive reach over the region, competitively cheaper pricing & a Glocal approach when was brought into the arena for...