Issues of continuity and discontinuity of home-based resources transfers in emerging markets strategy

Abstract

The purpose of this paper is to examine the issue of resource strategies in the development of emerging markets. Shintaku and Amano, a major study on this issue, proposed that discontinuities in market conditions between developed and emerging markets interfere with the continuous exploitation of home-based resources in emerging markets. Based on the empirical evidence (for e.g., in the case of Shiseido and YKK) and existing literatures on strategic management and IB, we examined the relationship between the continuous and discontinuous use of home-based resources of MNEs in the development of emerging markets. In this article, we propose that there is a "width" to weigh placing on home-based resources in the development of emerging markets, which gives rise to three resource strategy issues. First, when a large weight is ascribed to home-based resources in emerging market development, there will be no serious strategic issues in resource utilization (for e.g., the case of Shiseido in China). Second, when a large weight is ascribed to new resources (i.e., weight of home-based resources is small), then the discontinuity of home-based resource transfer will cause an incompatibility dilemma between the home-based resources and newly developed resources (for e.g., the case of YKK in China). Third, in addition to this original discontinuity concept, if the cost of integration with new resources and the transfer of home-based resources are extremely high, then it may cause serious management problems. By analyzing a continuum framework of the continuity and discontinuity of home-based resource transfers, we believe that it is possible to provide a theoretical basis for the issue of resource strategy in the development of emerging markets.