Inter-firm Rivalry in the Airline Industry- myassignmenthelp.com

Question: Discuss about theInter-firm Rivalry in the Airline Industry. Answer: Overview and Type of the paper: Content and objective: The objective of the paper is to study the sources of competitive advantage of the multinational companies based in emerging economies like, India and China enjoy in the international markets. Today the emerging economies like India, China and Brazil are experiencing a great deal of market development. The countries are experienced economic development, which has led to increase in per capita income and purchase power of their people. This has attracted more and more multinational companies to these countries. These countries like India and China have also developed their own multinational companies, which have strong presence in the developed markets and enjoy great competitive advantages. The paper would delve into the factors, which are responsible of these multinational companies enjoying competitive advantage internationally. Global market opportunities: The multinational companies based in emerging economies like India and China enjoy global market opportunities. They conduct aggressive competitor competitor companies from all round the world. They conduct analysis of the strategies of their companies in the light of their own strategies (Alden et al. 2013). This analysis shows that rivalry between firms, the stiff competition between them to gain the top position in the market and earn massive revenue requires the companies to conduct competitive analysis their competitors. It can also be pointed out that analysis of the competitors and their strategies make companies form strategies to beat or give tough competition to their rivals. These multinational companies like Tata Consultancy Services and Infosys can explore new markets of Europe, North America and South America. They can get access to the resources in these countries like highly educated human resources, advanced technology and easily available finance (Brem and Wolfram 2 014). These easy access to global resources allow these multinational companies to operate in the western and developed markets like the United Kingdom and France successfully. Market commonality: Market commonality refers to the number of markets in which the competing companies are present and the degree of importance of each of these markets to these companies. The multinational companies based in the emerging countries like India, China and Brazil enjoy a very strong presence in the developed markets as well. The companies like Alibaba based in China are entering markets like the United States of America. They are sharing these markets with the ecommerce companies like Amazon. It can be pointed out that the home country of Alibaba is China while that of Amazon is the United States of America (Sinha, Weitzel and Bishop 2015). The two companies share common market and make strategies to surpass each others market share in both the United States of America and China. Resources similarity: Resource similarity refers to the similarity in tangible and intangible resources which competing firms share. One can point out that the two ecommerce companies, the American ecommerce company Amazon and Chinese ecommerce company Alibab share various tangible resources like human resources and technology. They also share intangible resources like goodwill and brand equity. This sharing of similar kinds of resources leads to the competing companies form identical business strategies to compete with other (man and Svensson 2015). Outsource products of multinational companies based in developed economies The multinational companies like TCS and Infosys based in the emerging markets like India started outsourcing products of multinational companies from developed economies like IBM. This allowed them to gain knowledge and expertise to manufacture and market products of their own under their own brand names. These firms have emerged into powerful competitors and in fact, are giving their counterparts from developed economies, tough competition. Today they engage in stiff inter-firm rivalry which is a very crucial part of business strategies of these companies because they are capable of affecting each others profit earning and market positions. Thus, the apex management consider inter-firm rivalry to form strategies related to marketing, human resources, product planning and various other important areas of business (Schaufeli and Taris 2014). Global knowledge and process consultant: The global firms from the emerging economies have access to global knowledge and process consultant. They are able to exploit the technological advancements, human resources available and the other production factors available in the developed markets like the United States of America. The multinational companies from China and India today are able to gain knowledge about the needs of their clients and are able to design their products according to their needs. These multinational companies obtain consultancy services from the foreign markets to gain clear idea about the market conditions, government laws and customer tastes. This consultancy firms provide valuable knowledge about the foreign markets which the apex management of these MNCs utilise to make business strategies. This global knowledge and process consultants thus help the MNCs based in emerging markets form strategies, which allow them to operate in cost effective manner. It can also be pointed out that the apex manageme nt bodies of these companies make strategies pertaining to foreign competitor analysis and market condition analysis at various levels like at firm level, brand product analysis from marketing angle and at industrial level by analysing the macro economic conditions. It is this global knowledge, in depth study of the market conditions and formation of aggressive marketing strategies based on these findings are enabling the MNCs based in emerging markets dominate the developed markets globally (Lapalme and Conklin 2015). Huge financial strengths of the MNCs based in emerging markets: It must be pointed out that just like the developed market counterparts, the multinational companies based in the emerging economies are mostly public limited companies. Degree of presence of competing companies exhibits their market position, their power to overlap each others consumer base and influence each others profitability. The public limited company status allows these the companies to obtain listing on several stock exchanges in the host markets. For example, the Chinese ecommerce giant Alibaba is listed on the New York Stock Exchange. This listing on several stock exchanges allows these companies to issue shares and generate huge capital from the global market (Puutio, Kykyri and Wahlstrm 2013). This gives them the financial strengths to compete and sustain in the global market. The American market is important to both the companies Amazon and Alibaba and they compete to increase their hold over it. It can also be said that they two companies share the same consumer base a nd overlap each others customer segment. This commonality of market and consumer base requires them to conduct competitive analysis to bring about innovative products to beat the competing products in the market. This stiff competition to gain maximum market share and profits gives rise to strong inter-firm rivalry at the firm level. This firm level rivalry requires the apex management bodies of both the companies to form aggressive business strategies (Ozleblebici, Pinto and Antonio 2015). Global resource share: The multinational companies like Alibaba and Vivo mobile phone company having their headquarters in the emerging markets like China enter global markets like the United States and Europe and obtain access to their resources. These powerful companies impact their Rival companies operating same market. The companies in the developed economies come under influences of similar macro economic conditions and share similar resources, which gives rise resource similarity between them. The companies under such conditions often share similar tangible and tangible resources, which lead them to form identical business strategies. As pointed that both American mobile company Apple and the Chinese mobile phone brand Vivo come under the similar market influences in the US like operating under similar government policies and following similar wage laws while employing talent in the American market. This similarity in market influences make them share similar resources to compete in the market. They both exploit unique bundle of tangible economic resources like human resources and technology. They also share bundles of intangible resources like market goodwill. This similarity of resources factor makes them form similar strategies pertaining to various areas like marketing and financing to give each other tough competition. This access to global resource like technology, natural resources and cheap labour provide competitive advantage to these MNCs in the foreign markets like France and the US. Global product line and consumer base: The MNCs based on emerging markets like China and India as pointed out have succeeded in gaining access to global resources all over the world. They are as a result able to build huge product line to meet the demands of the customer profiles all over the world. Companies have market profile pertaining to product line and customer segments. They have different resource endowments, which allow them to compete with each. These varieties in market profiling and resource endowments decide the level and manner of competition between the firms. The resources and market position competing firms own determine how they attack and counterattack each other in the global market space. Two major companies in the market enter into stiff competition to retain their top market position and may sometimes enter to partnership to benefit from each others resources. This interchange of partnership and rival relationship take place between two companies because the often share same markets and resources. For example, in the automobile sector, the Asian MNCs often enter into joint ventures or acquire foreign companies to gain stronger foothold in the global markets. Tata Motors, the Indian automobile giant acquired the British premium automobile brand Jaguar Land Rover. It again entered into joint ventures with Brazil based Marcopolo S.A. t manufacture buses and with Hitachi to manufacture excavators. This analysis shows that these joint ventures and acquisitions help the multinational companies based in emerging markets gain stronger position in the global market and higher competitive advantage. These ventures also allow these companies to get access to global consumer ba se and gain robust revenue to catering to their needs. Concept, arguments, claim and intended contribution: Wang et al.(20178) state the global companies based in emerging markets like India and China have gained strong international positions in the global markets. These companies according to them are holding top market positions owing to their competitive advantage. Hoenen and Kostova (2015) point out that these companies obtain competitive advantage by their public limited company status, access to global resources and capability to serve a global consumer base. However, von Zedtwitz and Gassmann (2016) contradicts these two claims and argues that the multinational companies based on the emerging countries face stiff competition from the multinational companies based in developed countries. They point that the governments of the developed countries can provide stronger support and incentives to their multinational companies compared to the governments of the emerging countries. This allow the MNCs of the developed companies dominate the market and counteract the challenges posed by the MNCs based in the emerging countries. Hypothesis: Thomas Friedman in his hypothesis on globalisation spoke about a flat world. According to Friedman, there are three eras of globalisation. The first era started when the countries like The United Kingdom and France colonised several countries of Asia, Africa, North America, South America and Australia. They colonised these lands to acquire their resources and cheap human labour available in the countries like the United States of America, Brazil and India. The second era started with globalisation of the companies into foreign markets. The people in these countries experienced globalisation through these companies. The multinational companies got access to the business facilities like labour, financial resources, material resources and consumer bases in their host countries. The third era of globalisation is essentially driven by technological development, which allows individuals to transact and conduct business across the world. According to Friedman today individuals have grown so powerful with the availability of resources and technology that they are capable of influencing the whole world with their actions. This increasing power of people also put the world at risks or radical activities like terrorism capable of disrupting the economic development of the whole world. Globalisation era 1 Globalisation era 2 Globalisation era 3 Colonisation of other countries by powerful European countries like the United Kingdom and France Expansion of companies into markets Increasing power of individuals More resources available to the colonisers and exploitation of the people of the colonies High profiting aim and exploitation of workers Entrepreneurial ventures and empowerment of individuals(positive impact) Terrorism(negative impact) Figure 1. Hypothesis of globalisation (Source: Author) Research Design and Method: The researcher has used qualitative method to gather information on the topic, which is competitive advantage of multinational companies based in the emerging countries. The paper consists of information from various newspaper articles, magazines and books to gain substantial information. Result: The result of the research is that it can be pointed out that multinational companies based in the emerging economies. The outcome of the paper was finding out that the multinational companies like Alibaba based in emerging markets like China enjoy competitive advantage in the international markets. The Implications: The above study implies that MNCs from emerging economies are giving tough competition to the MNCs based on developed economies. It can also be implied that the MNCs of these two categories enter into business transactions and joint ventures worth billions of dollars. Summary: It can be summarised that the MNCs form the emerging markets enjoy high competitive advantages in the global markets. They have spread into almost all the major markets of the world and are earning high revenue due to the high market position they have acquired. References: Alden, D.L., Kelley, J.B., Riefler, P., Lee, J.A. and Soutar, G.N., 2013. The effect of global company animosity on global brand attitudes in emerging and developed markets: Does perceived value matter?.Journal of International Marketing,21(2), pp.17-38. Brem, A. and Wolfram, P., 2014. Research and development from the bottom up-introduction of terminologies for new product development in emerging markets.Journal of Innovation and Entrepreneurship,3(1), p.9. Hoenen, A.K. and Kostova, T., 2015. Utilizing the broader agency perspective for studying headquarterssubsidiary relations in multinational companies.Journal of International Business Studies,46(1), pp.104-113. Lapalme, J. and Conklin, J., 2015. 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