Article ID Journal Published Year Pages File Type
1000511 International Business Review 2012 14 Pages PDF
Abstract

Multinational companies (MNCs) can play an important role in poverty alleviation. The international business literature, however, lacks theoretical insight and systematic empirical evidence of MNCs entering low-income markets. Therefore, this study sheds light on the questions: How MNCs enter low-income markets? How MNCs operate? And how they gain knowledge in these markets? Using a multiple case study approach, we analyze MNCs with business activities in low-income markets by taking recourse to the internationalization process model of Johanson and Vahlne. The results reveal that companies develop knowledge by enlarging their mode of market commitment to a new level that exceeds local manufacturing and production facilities.

► The entry of MNCs in BOP-markets is initiated through knowledge/experience-based factors. ► MNCs cooperate with non-market partners to overcome market constraints. ► MNCs require a new mode of market commitment in BOP-markets: Embedded subsidiaries.

Related Topics
Social Sciences and Humanities Business, Management and Accounting Business and International Management
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