White Good Sector

Journal of World Business 42 (2007) 369–383 www.socscinet.com/bam/jwb

Accelerated internationalization by emerging markets’ multinationals: The case of the white goods sector
Federico Bonaglia a,*, Andrea Goldstein a,1, John A. Mathews b,2
b

´ OECD Development Centre, 2 rue Andre Pascal, 75775 Paris Cedex 16, France Macquarie Graduate School of Management, Macquarie University, Sydney NSW2109, Australia

a

Abstract The emergence of a ‘‘second wave’’ of developing country multinational enterprises (MNEs) in a variety of industries is one of the characterizing features of globalization. This paper documents how emerging markets’ MNEs (EM-MNEs) may follow quite different patterns to reach, or at least approach, global competitiveness. In particular, it investigates how threeEM-MNEs pursued global growth through accelerated internationalization combined with strategic and organizational innovation. Haier (China), Mabe (Mexico) and Arcelik (Turkey) emerged as multinationals in the large home appliances (so-called ‘‘white goods’’) industry. The ¸ recipe for the success of these firms seems to lie in their ability to treat global competition as an opportunity to buildcapabilities, move into more profitable industry segments, and adopt strategies that turn latecomer status into a source of competitive advantage. At the same time, their experiences show that there are many strategies and trajectories for going global, consistent with a pluralistic conceptualization of globalization. # 2007 Elsevier Inc. All rights reserved.

What are the ‘‘big questions’’ ininternational business (IB) research? Buckley (2002) claimed that the research agenda might be running out of steam. He suggested that the IB agenda had moved through three phases in the 20th century, concentrating on new developments observable in the world of international business itself. The initial focus on foreign direct investment (FDI) and its determinants was followed by one on multinationalenterprises (MNEs) and their rationale and sources of advantage and, since the 1990s, a third focus on globalization and its driving influences. Buckley and Ghauri (2004) suggested that the third

* Corresponding author. Tel.: +33 1 4524 9603. E-mail addresses: federico.bonaglia@oecd.org (F. Bonaglia), andrea.goldstein@oecd.org (A. Goldstein), John.Mathews@mgsm.edu.au (J.A. Mathews). 1 Tel.: +33 14524 8946. 2 Tel.: +61 2 9850 6082. 1090-9516/$ – see front matter # 2007 Elsevier Inc. All rights reserved. doi:10.1016/j.jwb.2007.06.001

topic might indeed constitute a ‘‘big question’’ that could guide future research. In this paper we take the arguments of Buckley and Ghauri further, and make the proposition that one of the most interesting outcomes of globalization has been the rise of a‘‘second wave’’ of MNEs from emerging economies – so-called emerging markets’ MNEs (EM-MNEs) – after the ‘‘first wave’’ documented by Kumar and McLeod (1981), Wells (1983) and Lall (1983). EM-MNEs appear to be driven directly by firm-tofirm contracting in a global setting. This would be expected in an epoch of multiplying global interfirm connections that offer more possibilities for firms (even quite smallfirms) to be drawn into the global economy. Their contemporary internationalization (in terms of rising ratios of sales, assets, and employment abroad) may be said to be one of the notable outcomes of globalization. Just how EM-MNEs utilize the multiple connections of the globalized economy to gain a

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` distinctiveadvantage vis-a-vis incumbents remains a topic to be explored in depth. What are the factors explaining their success? To what extent is the experience of the few companies from the developing world that have become MNEs useful (replicable) for other firms struggling to move up the value-added and technology ladder? Our study is designed to provide some answers to these questions. We focus on the...