1st Edition

Building Network Capabilities in Turbulent Competitive Environments Business Success Stories from the BRICs

By Paul Hong, YoungWon Park Copyright 2015
    244 Pages 43 B/W Illustrations
    by CRC Press

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    Brazil, Russia, India, and China (BRIC) are among the largest and fastest-growing economies in the world. The enormous size of the customer base in these emerging markets is the strategic concern of global business firms. Successful market performance in these markets requires sound understanding of dynamic environmental factors and timely investment of appropriate resources. This book presents strategies for recognizing the challenges and optimizing the opportunities for building network capabilities and competitive advantage within the context of these emerging markets.

    Building Network Capabilities in Turbulent Competitive Environments provides a thorough review of the literature and an unparalleled abundance of fascinating case studies featuring Japanese, Korean, and indigenous business examples. To gather real-world information, research teams made numerous field visits to many firms in the BRIC markets to meet and interview executives and observe their manufacturing and supply chain practices.

    The information in this book is presented within a fully formulated theoretical framework of three core competencies: technology competence (capability to offer innovative products that fit these markets), customer competence (capability to understand and satisfy different customer needs), and linkage competence (ability to integrate technology and customer competence). The book also covers the concepts of product architecture and supply chain management to provide a more in-depth analysis of global firms operating in BRIC markets.

    The Authors

    Research Framework: Core Competence and Global Strategy
    Importance of Network Capability in the BRICs Market Environment
    Network Capability and Global Competitive Strategy
    Three Types of Core Competence and Global Expansion Strategy
    Core Competence and Product Architecture
    Product Architecture and Supply Chain Integration
    Network Capability Dynamics and Portfolio Strategy
    Network Capability and Intellectual Property Strategy
    Structure of This Book

    Comparisons of Strategies of Established Global Firms and Indigenous Firms from BRICs
    Global Supply Chain Management (SCM) Strategy and Specialization
    Supply Chain Management in Emerging Markets
    Supply Chain Management and Product Architecture
    Cases of Collaboration between Global Firms and Indigenous Firms
    Global Supply Chain Collaboration between Apple and Foxconn
    Growth Process of the Chinese Mobile Phone Industry
    LCD Industry: An Illustration of Supply Chain Structure in East Asia


    Strategies of Chinese Indigenous Firms
    Chinese Economic Context
    Case Studies of Chinese Firms
    Case Study of Haier
    History of Haier
    Strategic Management System: Four Phases of Development Strategy
    Haier’s Product Strategy
    Lenovo Case
    Its Early Market Experiences and Global Market Entry
    Establishing Lenovo’s Brand and Pursuit of Its Unique Customer Base
    Diversification of Its Businesses and Enhancement of Global Competitiveness
    Lenovo Acquired IBM PC and Expanded Its Global Target Market

    Strategies of Indian Indigenous Firms
    India’s Economic Growth Patterns
    Case Studies of Indian Firms
    Tata Group
    Mahindra & Mahindra Limited (M&M)
    Big Bazaar

    Strategies of Brazilian Indigenous Firms
    Brazil’s Economic Context
    Brazilian Firms

    Strategies of Russian Indigenous Firms
    Russian Economic Context
    Energy-Dependent Economic Structure
    Aggressive Public Expenditures
    Russia’s Automotive Industry
    Current Status of the Russian Automotive Industry
    Growth of Russian Indigenous Firms: AvtoVAZ
    Russian Energy Industries
    Growth of Russian Indigenous Firms: Gazprom
    Comparison of Gazprom with Other Firms


    Strategies of Japanese Firms in the Chinese Market
    Strategy of Komatsu China
    An Overview of Komatsu China
    Structure of KOMTRAX of Komatsu China
    KOMTRAX’s Usage Patterns in Emerging Markets
    Competition with Local Chinese Firms
    Strategy of Daikin China
    Daikin’s China Market Strategy
    Product Development Strategy of Daikin China
    Brand Marketing Strategy of Daikin China
    Strategic Talent Development That Supports Global Monozukuri (i.e. Japanese Manufacturing)
    Strategy of Honda Guangzhou
    Honda’s Entry Strategy for the Chinese Market
    Product and Technology Strategy of Honda China
    Marketing Strategy of Honda China
    Implementation of Localization Strategy: Establishing Collaboration System and Talents Development
    Toyota’s Global Supply Chain Management (SCM) in China
    Strategies of Other Japanese Global Firms
    Strategy of Yaskawa Electrics of China
    Strategy of Panasonic China
    Strategy of Clarion China

    Strategies of Japanese Firms in the Indian Market
    Strategy of Toyota India
    Toyota Kirloskar Motor (TKM) and Toyota Kirloskar Auto Parts (TKAP)
    Development of Etios Sedan
    Strategy of Honda India
    Nikkei Makers Lead in Indian Motorcycle Market
    Honda’s India Strategy
    Strategies of Other Japanese Global Firms in India
    Strategy of Seiko Epson India
    Strategy of Makino India
    Strategy of Denso India

    Strategies of Japanese Firms in the Brazilian Market
    Komatsu Brazil
    A Brief Overview
    Construction Equipment Usage Patterns in Brazil and Komatsu’s Response
    Strategy of Toyota Brazil
    Brazilian Automotive Industry
    Toyota’s Entry into the Brazilian Market
    Toyota Brazil: Plants and Quality Management
    Present and Future of Toyota Brazil
    Brazil Honda’s Strategy
    Brazilian Motorcycle Market
    Honda’s Entry into the Brazilian Market
    Honda Brazil’s Motorcycle Production and Marketing Strategy
    Other Japanese Firms in Brazil
    Strategy of Bridgestone Brazil
    Case of Epson Brazil


    Strategies of Korean Firms in the Chinese Market
    Samsung China’s SCM Collaboration Strategy
    Samsung LCD’s SCM System
    Samsung China LCD’s Integration of BLU Suppliers
    LCM (Low Cost Module) Strategic Challenges
    Global SCM Strategy of Hyundai Beijing
    Hankook Tire Strategy
    Market Reality
    Strategic Focus/Organizational Leadership
    Product/Value Innovation
    Strategic Alliance
    Global Market

    Strategies of Korean Firms in the Indian Market
    Historical Background of Korean Firms’ Entrance to India
    Localization Strategy of Hyundai Motor India (HMI)
    Investment Goals in Indian Context
    Localization Strategy: Local Adaptive Product Development and Marketing Strategy
    Human Resource (HR) Policies: Develop Native Leaders and Education/Training at Headquarters
    Samsung India Electronics (SIE)
    Investment Context and Strategic Priority
    Localization Strategy: Pursuit of FPD TV–Based Premium Strategy
    HR Policy of Management–Employee Relationships: Continuous Improvement by Field Employees
    LG Electronics India (LGEI)
    Investment Contexts and Strategic Priority
    Localization Strategy: Customer-Driven Marketing and Premium Product Strategy
    HR Policy and Management–Employee Relationships: Native Leadership and Incentive Systems

    Strategies of Korean Firms in the Brazilian Market
    Status of Korean Firms in Brazil
    Localization Strategy of Korean Firms in Brazil
    Samsung Brazil
    LG Brazil
    Comparisons of Samsung and LG
    Concluding Remarks

    Concluding Remarks and Future Research Issues
    Comparison of Japanese and Korean Global Firms versus Indigenous Firms from BRICs
    Emerging Market Strategy: Direction and Prospect
    National and Firm Level Collaborations Among BRICs and Beyond
    Firm Level Strategies in Global BOP Markets
    Competitive Advantage of Firms in Emerging Economies



    Dr. Paul Hong is a professor of operations management at the University of Toledo, USA. He holds a PhD degree in manufacturing management and engineering from the University of Toledo. He also holds an MBA and an MA in economics degree from Bowling Green State University, USA and a BA from Yonsei University in Seoul, Korea. He has presented and published more than 200 articles in conferences and journals including Journal of Operations Management, International Journal of Production Research, Corporate Governance: An International Review, Journal of Supply Chain Management, Benchmarking: An International Journal, British Journal of Educational Technology, Strategic Outsourcing: An International Journal and European Journal of Innovation Management, Journal of Production Economics, International Journal of Operations and Production Management, Journal of Business Research, International Journal of Technology Management, International Journal of Information Management, Management Decision, Journal of Cleaner Production, Journal of Purchasing and Supply Management, Journal of Service Management, and Business Horizons.

    He is the recipient of Journal of Operations Management Best Paper Finalist Award (2006) for the paper, "Role Change of Design Engineers in Integrated Product Development)," Emerald Literati Network 2011 Awards for Excellence for the paper, "Integration of Supply Chain IT and Lean Practices for Mass Customization: Benchmarking of product and service focused manufacturers," and Best Paper Awards on "Flexible and Redundant Supply Chain Practices to Build Strategic Supply Chain Resilience: Contingent and Resource-Based Perspectives" and "Using Social Media for Competitive Advantage: An Empirical Study" at Annual North American Research Symposium in Tempe, Ariz. 2012 and 2013. He is an editorial review board member of several journals including Journal of Operations Management, Journal of Humanitarian Logistics and Supply Chain Management (JHLSCM), and Journal of Enterprise Information Management (JEIM). Since 2006, he has been special issue editor for journals such as Benchmarking: An International Journal (BIJ), International Journal of Business Excellence (IJBEX), International Journal of Services and Operations Management (IJSOM), International Journal of Procurement Management (IJPM), and International Journal of Production Economics (IJPE). He is conference chair and international network coordinator of annual International Symposium and Workshop on Global Supply Chain, Intermodal Transportation and Logistics—4th Symposium in Madrid, Spain, 5th Symposium in Tokyo, Japan and 6th Global Supply Chain Conference in Dearborn, USA. His research interests are in business ecosystem innovation strategy, global supply chain management, and international comparative studies.

    Dr. YoungWon Park is an associate professor of GCOE Project of Manufacturing Management Research Center at the University of Tokyo, Japan. He holds a PhD degree in the Department of Advanced Social and International Studies from the University of Tokyo, Japan. His articles have been published in journals including Management Decision, International Journal of Production Economics, International Journal of Technology Management, International Journal of Information Management, Business Horizons, Journal of Business Research, Benchmarking: An International Journal, International Journal of Services and Operations Management, International Journal of Logistics Systems and Management, International Journal of Business Excellence, International Journal of Procurement Management, Akamon Management Review, Japan Academy of International Business Studies, Japanese Society for Science and Technology Studies, and the Japan Society of Information and Communication Research.

    He has received research awards including Dissertation Paper Awards from the Japan Association for Social Informatics (JASI), Best Paper Awards from The Japan Society of Information and Communication Research (JSICR), Research Awards of the Social Science Field from The Telecommunications Advancement Foundation (TAF), and Research Students Awards of the Social Science Field from The Telecommunications Advancement Foundation (TAF). His research interests are in technology management, manufacturing and IT strategy, and global supply chain management.

    "BRICs have increased their influences on the entire world economy since the beginning of this century, but there have been relatively few studies that focused on their critical industrial issues, such as global supply chain management, by applying a consistent analytical framework to all these countries. Dr. Hong and Dr. Park made a remarkable number of case studies on Korean and Japanese global firms and their BRICs operations with a model of adaptations between product architecture and technology-customer-linkage capabilities. The balance between their tenacious fieldwork and logical thinking has made this seminal book’s arguments persuasive to both researchers and practitioners in the field of global management."
    — Takahiro Fujimoto, Professor of Faculty of Economics, The University of Tokyo, Japan

    "This book introduces the secrets of success by Korean and Japanese firms in the BRIC markets where the uncertainty and turbulence of the business environment presents unprecedented challenges for global business firms. I am very sure that this book will provide a lot of interesting and insightful lessons for the broad spectrum of audiences as well as CEOs and executives."
    — Seung-Chul Kim, Ph.D, PMP, PRINCE2 Trainer, Associate Dean/Director of MBA Programmes, Professor of Operations & Service Management, School of Business, Hanyang University, Seoul, Korea

    "If your organization wants to be successful in our turbulent, competitive international marketplace then it is imperative that you know and understand your own capabilities, competencies, and capacities in formulating and executing your organization's global strategy. Drs. Park and Hong have given us a tremendous toolkit that can help corporate executives, consultants, and academicians better understand the elements needed for real success on the world stage. This book is a must read for executives, researchers, and students who are serious about expanding their knowledge and understanding of how to create competitive advantage in the global marketplace of the twenty-first century!"
    — Clinton O. Longenecker, PhD, Author, Consultant, Researcher, Motivational Speaker, and Stranahan Professor of Leadership and Organizational Excellence at The College of Business and Innovation at the University of Toledo, Ohio, USA

    "This rare book covers the emerging global businesses of BRICs and their key success factors for competitive advantage. This is based on extensive field visits along with a solid theoretical model. In view of the enormous economic potential of Brazil, Russia, India, and China, Dr. Hong and Dr. Park's book addresses crucial issues that many global firms face. I highly recommend this book to both academic researchers and business leaders."
    — Hideaki Miyajima, Professor, Graduate School of Commerce, Waseda University, Japan

    "Many of us frequently talk about globalization, but do we really understand the dramatic implications for our organizations and supply chains? What specifically must we do to maintain or grow our competitive position in today’s global network? Building Network Capabilities in Turbulent Competitive Environments, the second volume highlighting business success stories from the BRIC countries, is an important read for business executives, research thought leaders, and ambitious students interested in understanding global trends toward collaboration, but more importantly the strategic implications of these trends. If you are interested in reading about global trends, there are many books to choose from, however, if you are interested in learning about strategic actions that have led to success in emerging markets, then this is the book for you!"
    — David Dobrzykowski, PhD Department of Supply Chain Management and Marketing Sciences, Rutgers, the State University of New Jersey, USA

    "If you have hit against the wall when it comes to global market strategy ideas, Building Network Capabilities in Turbulent Competitive Environments is one of the best-recommended reference books for academicians as well as practitioners alike who are looking to be adaptive to the ever-changing global market strategies necessary to thrive."
    — Jooh Lee, Ph.D, Professor of Management & Entrepreneurship, William G. Rohrer College of Business, Rowan University, Glassboro, New Jersey, USA

    "This book presents a unique overview of the strategies implemented by leading firms operating in the immense and fast-growing markets of Brazil, Russia, India, and China (BRIC). The peculiarity of the book is the comparison of Japanese and Korean global firms with BRIC indigenous ones, by means of case studies of leading brands, thus allowing the understanding of the different strategic choices and their outcomes. A sound theoretical framework is provided at the beginning of the book, to help the reader in interpreting the various cases. This makes the book interesting for both managers, students, and researchers."
    — Federico Caniato, Associate Professor, Dipartimento di Ingegneria Gestionale Politecnico di Milano, Italy

    "The second edition of Building Network Capabilities: Business Success Stories has expanded its scope to provide a valuable, theoretically driven and practical guide to developing network capabilities in the rapidly influential BRIC economies. In today’s dynamic and globally competitive business environment, organizations need to be able to adapt quickly to a variety of internal and external hazards. Hong and Park provide examples of how companies are doing this, in both the fast-paced BRIC markets and in more established markets, and describe the network requirements needed to do this successfully. Useful for researchers, students, and executives, this text fills a gap in the business press, and is a valuable reference tome for academics and practitioners alike."
    — Erika Marsillac, PhD, Dept of IT/DS/MSCM, Strome College of Business, Old Dominion University, Norfolk, Virginia, USA