Markets Transnational Corporations in Emerging: in Search of Successful Business Model

DOI: 10.20542/0131-2227-2014-10-5-17

A. Bereznoi, National Research University Higher School of Economics, 9/11 Myasnitskaya Str., Moscow, 101000, Russian Federation (

Abstract.      The article starts analysis from the recent trend of fast growing importance of emerging markets for Western TNCs and the related shifts in the geography of their foreign investment activities. Despite this visible investment boom the actual performance of many TNCs in emerging markets has not met their expectations and a number of major players have already lost enormous sums of money. The author argues that one of the main reasons is the obvious desire of Western firms to adopt their domestic business models in the new structurally different environment which is frequently rejecting them as inefficient. 
     Special attention is given to business model definition which, according to the author’s concept, should include three fundamental characteristics: (1) mechanism of value creation and delivery to the target client group, (2) mechanism of profit generation, and (3) mode of maintaining sustainable balance between two mechanisms above on the basis of the given resources and processes and simultaneous creation of sustainable competitive advantages. An attempt is made to disclose why business models, quite successful in the developed market economies, are often failing when TNCs try to transfer them unchanged to the emerging markets. The author explores the main directions of effective business models’ re-engineering bringing them in line with the specifics of local economic environment. These include significant product adaptation and related re-orientation to the new customer segments, re-building of local supply chain, distribution, and even financial infrastructure. 
     The author also draws attention to the new features of TNCs’ global organization emerging under the conditions of simultaneous deployment of multiple business models in various host economies.

Keywords: transnational corporations (TNCs), emerging markets, business model, operating model, corporate center, regional divisions, network model of global organization

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For citation:
Bereznoi A. Markets Transnational Corporations in Emerging: in Search of Successful Business Model. World Eonomy and International Relations, 2014, no. 10, pp. 5-17.

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