Regional organisations in emerging markets - The case of Volvo CE in the Middle East and North Africa

Abstract

The move towards globalisation among MNCs has shifted the power structure from one of geographical hierarchy to one of a more global business. This move is however counterbalanced by the need for MNCs to be flexible enough to adapt their strategies to local conditions.

In emerging markets, MNCs normally set up regional organisations when the region is becoming too complex, too large and too far away to be handled from corporate headquarters, or that it becomes too different from other parts of the world. Moreover, strategies born in and suitable for mature, slow moving markets of Europe can hardly be expected to work in the fast growing, rapidly changing environments of emerging markets. Hence, strategies as well as organisations have to be adapted to suit to the diverse environments of emerging markets.

In this thesis, the authors examine how companies operating in heavy equipment industries can enhance their competitive advantage by establishing and developing regional organisations in emerging markets. The outcome of the research is a new way of looking at competitive advantage, acknowledging the relationship between strategy, organisation and information in a regional perspective of emerging markets.