Kazakhstan is a relatively new country that has been a nation-state since the collapse of the Soviet Union. The country has been transitioning to a market economy, with property rights being established and private entrepreneurship being encouraged. The transition has led to some firms making inroads into international markets. For this study, we chose five companies – Air Astana, Sberbank Kazakhstan, Kamaz Kazakhstan, Sportmaster, and Tsesna. Of these, Sberbank and Kamaz originated in Soviet times; Sport Master evolved in the immediate aftermath of the dissolution of the Soviet Union; and Air Astana and Tsesna are relatively new domestic firms that have tried to develop specific competitive advantages. Some of the capabilities that these companies initially developed were in product innovation, branding, distribution, and human resources. A more general competency that all these companies developed, first in their home market but then in foreign markets, is the ability to survive and succeed in institutional conditions that are still evolving and changing. While new institutions were still developing and building credibility, networks and political connections were still important and played a role in most of these markets.

Firms from different countries face different challenges to growth and development, with firms in emerging markets generally being at a disadvantage compared to developed countries’ firms. Despite this, some emerging market firms have started expanding to other countries, becoming progressively more established. This chapter will present the case of seven Mexican firms that have undergone an internationalization process and have become multinational corporations and exporters. To analyze this, the study focused on the capabilities each firm had that provided an advantage locally and globally, and whether these capabilities were different for each market. In the comparison, it was discovered that the most common and relevant capabilities for these firms were understanding local customer needs, corporate brand and reputation, and relationship capabilities.

This chapter introduces the background and key research question of the project for this book, which is an output of a multi-country study on a highly important subject in emerging markets: what types of capabilities do emerging market firms need, and how do they acquire and upgrade these capabilities in order to achieve competitiveness in the global market? The chapter highlights two unique aspects of emerging markets: weak institutions and lack of endowment. The main theme of the book thus becomes how emerging market companies develop competitive capabilities to international levels facing these two critical constraints. The chapter also discusses the organization of the book, which comprises twelve different country studies, and presents the methodology used to select and evaluate the firms studied.

Russia is the largest country in the world, ranking ninth by population with 146.8 million people. It contains 30 percent of the world’s natural resources, making it the most resource-rich country in the world. The Russian economy is sixth in the world in terms of GDP (purchasing power parity), according to the IMF. Our study of companies’ strategic capabilities is based on a comparative analysis of five firms operating in Russia. Three of them are domestic – SIBUR (Siberian-Ural petrochemical and Gas Company), Gazprom Marketing & Trading (part of the Gazprom group), and ByTerg, all representing exporters in the high-tech industry. The other two firms are multinational companies – Ecolab and Swilar, representing the high-tech and service industries respectively. This qualitative study, relying on semi-structured interviews, revealed that customer orientation is a crucial strategic capability, highlighted by all firms. Very important strategic capabilities also include product manufacturing and general sales capabilities (highlighted by 80 percent of respondents).

We analyze how firms from emerging markets upgrade their capabilities to improve their international competitiveness. We argue that firms use a combination methods, the four-I mechanisms, to upgrade their capabilities – imitation, integration, incorporation, and internal development – and that the underdevelopment of emerging markets affects this catching-up process. We propose that initially, as laggards in global competition, firms are more inclined to imitate products and services from more sophisticated firms, leveraging the relatively weak intellectual property protection of their home countries and aiming to serve low-income consumers. As they catch up, firms are more likely to integrate best practices through alliances to obtain technologies, or to learn by serving as suppliers of more sophisticated firms. Firms then incorporate best practices by acquiring technologies or firms that own sophisticated knowledge. Finally, as they catch up to leaders, firms focus more on internal development of capabilities. We highlight how the four-I mechanisms evolve with the development stages of firms and emerging economies.

South Africa is arguably the leading African economy, and its multinational corporations are increasingly expanding into wider Africa. We examine firms from the financial services sector (Standard Bank and Nedbank) and from agro-processing (Tiger Brands and Clover). We complement archival research with interviews with executives in South Africa and subsidiaries across the continent. A core capability was business acumen – both foundational and evolving. Firms seemed to struggle with novel, underdeveloped host contexts and it was important to remember “business basics,” given that the world in which they were doing business was evolving and the “basics” of business were changing fast. The other key capabilities both had to do with embedding. Multinationals did well when they were able to ensure embedding not only between the parent and the subsidiary, but especially between subsidiaries (which often faced similar challenges). Local embedding in the host country was critical, whether it involved regulators, suppliers, or customers.

This chapter seeks to investigate the nature of strategic capabilities required for Indian firms to successfully transcend domestic markets and venture abroad. The study is based on intensive case studies of four Indian firms in the manufacturing and services sectors. The findings indicates that the capabilities considered most important by the firm leaders for the internationalization of their activities were ability to develop resources internally, entrepreneurship, and ability to adjust to poor infrastructure need. Three interesting patterns also emerged in the way firms choose to expand their operations to other markets: capability complementing, capability augmenting, and new capability development. Overall, the study indicates that the competencies required to succeed are also significantly influenced by the industry type and prior history of internationalization by associated companies. To gain a better understanding of these issues it would be necessary to moderate for industry, size, and ownership effects.