Tracking the strategic responses of the domestic market leaders in different industries and identifying the common trends in responses

Abstract

As protectionist barriers are lifted in any emerging country and big foreign multinationals are granted entry in the businesses, there are always predictions of local companies in the emerging markets to fall apart. The market leadership position maintained by the local companies is forecasted to be lost in the wake of attack from foreign companies. MNCs due to their array of advantages such as advanced technology, huge sources of finance, powerful brands, professional management etc. are expected to take away the market leadership position from most of the local market leaders. This prediction of market leaders getting defeated on their home ground is stronger if the leader firm is managed by any business group or family. Business groups are assumed to be fret with a lot of inefficiency and are expected to either lose out or sell out their business to the foreign company. 1 But if the MNCs have all these advantages, there are some competitive advantages which lie with domestic companies and are not replicable by the MNCs so easily. Time and again, domestic companies have leveraged these competencies in order to successfully defend their market share. It would be interesting to find out if there exists a commonality in the way the market leaders respond to the challenges presented by the big multinationals on their way to defend their leadership position. In view of this we have formulated the following hypothesis and have tried to accept or reject it during the course of our project: