The relationship between interrelated strategic principles and financial performance of multinational corporations in the emerging market

Abstract

The emerging markets have become a new growth opportunity for multinational corporations (MNCs). This could be attributed to the stagnation of growth within the developed markets and the emergence of strong economic growth within emerging markets. Yet, MNCs have varying levels of success due to overlooking of certain components lacking in emerging markets, such as infrastructure. Furthermore, the strategic planning and execution frameworks utilised by MNCs are based on assumptions that are valid for the developed markets, but not always for the emerging markets.The objective of this research was to determine if there is a link between the application of specific interrelated principles for defining and executing strategy, defined by Raina (2010), and the financial success of MNCs when entering the emerging markets.The research found that there is clear evidence that if certain of the principles are applied by MNCs when entering the emerging markets, there is evidence of greater financial success.The research concluded that the interrelated strategic principles are a valuable framework to deliver financial success for MNCs entering the emerging markets.