Linkage, Leverage & Learning

http://www.fiec.espol.edu.ec/aefiec/Cetec

How

Main Question
do some firms

challenge

established positions in the global

economy, and displace incumbents, some of them highly advanced and fiercely competitive especially when the challengers start small, lack key resources, and are distant from major markets? (Mathews, 2006)
http://www.davidjurasek.com/makingbestdecisions.htm

 Firms from the Asia-Pacific region (or from peripheral areas) that have successfully internationalized and in some cases become Industry leaders. Start from behind, and overcome their deficiencies, in sometimes short periods of time, without any of the advantages of the incumbent industry leaders. They do so without initial resources, skills, knowledge, proximity to major markets, and without the (skilled) social capital. Succeed turning initial disadvantages into sources of advantage. For example, through partnerships and joint ventures. (Mathews, 2006).

Dragon Multinationals

www.thesundaytimes.co.uk

MNEs from the developing world

1st

Wave

2nd Wave

Success was due to difficulties less driven by cost factors[]but encountered at home and to more by a search for markets and incentives driving internatechnological innovations to compete tionalization (Mathwes, 2006). successfully in the global pre-globalization success economy(Yeung, 2000) cases, when international Latecomers that utilized pull factors investment flows were still and connections to accelerate their rudimentary (Mathwes, 2006) . internationalization.
(Mathwes, 2006)

New Zoology

Latecomers: countries and firms that arrive late on the industrial scene (Mathews, 2006) These firms are the latecomers and the outsiders that have now become global giants themselves -the Dragon Multinationals (Mathews, 2002a). firms from the developing world are becoming players in the global economy and that they have lessons to teach in the strategies they have adopted (Mathews, 2004; Bartlett and Ghoshal, 2000; Sinha, 2005)

http://omgtoptens.com/misc/10-most-common-reason-why-people-are-fired-from-job/

www.asmarterplanet.com/

Latecomers and newcomers do not start out in a cautious way. They tend to see a highly integrated world as their market (Mathews, 2006). by firms which lack substantial prior resource (Mathews, 2006).

Collaborative Strategies are most likely to succeed and are to be pursued

Latecomers & Newcomers: Distinctive characteristics

Accelerated Internationalization Organizational Innovation Strategic Innovation
http://onlyhdwallpapers.com

(Mathews, 2006)

Later and Newcomer s Impact

T he international economy is inhabited by few giants, and mostly by a large number of SMEs which are internationally active shaping the global market.
(Mathews, 2006)
www.consultingvp.blogspot.com

Later and Newcomer s Impact

They are not simply occupying space vacated by incumbents, In many cases they are creating new economic space Indeed the Dragon Multinationals help to expose the weaknesses and limits to traditional accounts of MNEs and to existing theories and

frameworks of IB

(Mathews, 2006).

Latecomers-Newcomers & Existing Framewoks

there is a need to have another approach to IB, as the existing ones apply only to Incumbent firms (typical MNEs).

RBV The incumbents see the world as full of competitors who are trying to imitate their success. evaluate resources in terms of their inimitability and non-

LLL newcomers and latecomers See the world as full of resources to be tapped, provided the appropriate complementary strategies and organizational forms can be devised. evaluate resources in terms of their imitability and transferability

(Mathews, 2006)

OLI The incumbents MNEs as deriving advantages from their superior resources that they exploit abroad.

LLL

newcomers and latecomers

seeking ways to access needed resources precisely through linking up with source firms abroad, and internationalizing in order to access the resources that they lack.

(Mathews, 2006)

Internationalization
Pull Process Push Process

Multiple Connections of the Global Economy

the process of the firms becoming integrated in international economic activities.

(Mathews, 2006)

An alternative and complementary framework grounded in globalization: LLL

Linkage, Leverage & Learning

Linkage

As latecomers and newcomers expand seeking resources (otherwise not available), collaborative forms of integration constitute overwhelming options when accessing external markets. Through linkage, the latecomer firm can tap its links with more advanced firms to acquire knowledge, technology, and market access.

(Mathews, 2006).

www.thoughtleadershipleverage.com

Refers to the ways that links can be established with incumbents or partners so that resources can be leveraged.

Leverage

Capacity to secure more from a relationship than the firm puts in it.
www.lma-consultinggroup.com

(Mathews, 2006)

Learning
Repeated application of linkage and leverage processes may result in the firm learning to perform such operations more effectively (organizational learning).

(Mathews, 2006)

www.ifal.org.uk

Features of the pattern of accelerated expansion by linkage and leverage

linkage and leverage facilitates accelerated international expansion. Linkage and leverage is well adapted to the interlinked character of the global economy. Linkage and leverage fits the needs of firms lacking initial resources.

(Mathews, 2006)

 it is the changing global environment that has speeded up the appearance of newcomers and latecomers, and that has provided opportunities for expansion and penetration for firms that can take advantage of, and complement, the weblike character of the multiple networks of the global economy
(Mathews, 2006)

Authors concluding thesis

 the picture I have developed is one of the global incumbents struggling to keep up with a fastchanging world economy where they are being outwitted by the more nimble newcomers and latecomers(Mathews, 2006) The international economy is thus likely to become the source of endless novelty and innovation, creating new opportunities but also creating pressures on incumbents to adapt or die.
(Mathews, 2006)

http://themoral.com/if-she-can-write-a-thank-you-note-you-can-too/

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