This book chapter addresses determinants of value creation by multinational enterprises (MNEs) in the still largely neglected research context of bottom of the pyramid (BoP) markets.Consisting of consumers living below the poverty line, BoP markets exhibit significantly different characteristics compared to the affluent developed or the aspirational emerging markets. Dealing with a wide range of diversity within a market where it is difficult to obtain reliable, generalisable information means that MNEs tend to face challenges upon entering them. Yet, the potential demand offered by BoP markets cannot be ignored and MNE's have shown increasingly that they are willing to innovate market-specific approaches to cater to BoP needs. We discuss the applicability of service-dominant (S-D) logic in subsistence context and identify commitment to the market, strategic CSR, and service quality as key firm level determinants of effective service marketing in BoP markets. We further identify social trust, technological outreach and performance orientation characteristics in target BoP market as key country level determinants. Finally, the book chapter offers a number of academic and managerial implications.
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Subsidiaries in emerging markets (EMs) are a valuable source of knowledge for multinational enterprises (MNEs). Accessing the vast potential of these markets is increasingly becoming a priority for businesses from developed countries, but success in the markets requires understanding marketing in the emerging market context, which may differ considerably from the accepted truths of the traditional Western approaches. This paper seeks to improve understanding of the emerging market contextual factors, which influence the willingness to transfer marketing knowledge from emerging market subsidiaries to headquarters of multinational companies. Using the GLOBE cultural framework, this paper proposes that the relationships between power distance, uncertainty avoidance, in-group collectivism, performance orientation, and future orientation with knowledge transfer willingness are made moderated by the EM characteristics of shortage of resources, strong socio-political governance, inadequate infrastructures, country of origin -effect and turbulence of the environment. A conceptual framework and propositions for future study are presented accordingly.
Absorptive capacity has been widely used in management and international business (IB) studies to explain the way organisations use external information to their benefit in commercial exchanges.This chapter attempts to extend the concept by applying it to the relationships between customersubsidiary-headquarter (HQ) of multinational enterprises (MNEs), where the subsidiary acts as the focal unit for knowledge flows. We further use absorptive capacity concept to explain the knowledge inflows, in terms of new service development and knowledge outflows, leading to value creation. Based on in-depth theoretical discussions, we present propositions addressing the organisational and social dynamics in the four phases of absorptive capacity, from acquisition and assimilation, to transformation and exploitation.
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