Determinants of strategic options in multinational market competition |
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Institution: | 1. Universidade Federal Fluminense, Brazil;2. Departamento de Computação, R. Recife s/n, Jardim Bela Vista, Rio das Ostras-RJ, Brazil;3. Departamento de Ciência de Computação, Av. Gal. Milton Tavares de Souza, s/n, Sao Domingos, Niterói-RJ, Brazil;1. DuPont Haskell Global Centers for Health and Environmental Sciences, Newark, Delaware, United States;2. Center for Molecular Toxicology and Carcinogenesis, The Pennsylvania State University, University Park, PA, United States;3. Department of Bioinformatics and Genomics, The Pennsylvania State University, University Park, PA, United States;4. Department of Statistics, The Pennsylvania State University, University Park, PA, United States |
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Abstract: | This article conceptually explores the determinants of strategic options in multinational market competition. It draws on and integrates three research streams in strategy and international management: action and response in competitive rivalry; multipoint competition, and global competition and strategy. Specifically, it examines the various factors that determine whether and when a multinational corporation (MNC), while under attack from a rival MNC, will adopt the following responses: doing nothing, defending, counterattack, and total war. Those factors are organized into four categories: (1) types of attack, including price cut, introduction of new product, entry into new market, and advertising campaign; (2) awareness of interdependence of multinational markets, determined by market overlap, MNC strategy, and MNC organization; (3) motivation for globally coordinated moves, determined by the centrality of national markets, strategic importance of national markets, perceived importance of national markets, and perceived importance of rivals; and (4) feasibility of response, determined by entry barriers and diversity of national markets as well as resource heterogeneity and differential between rival MNCs. The effects of these four categories of factors on the choice of response are explored respectively. Research implications are offered in concluding remarks. |
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