Index of Paper Presentations for the Parallel Sessions - Academy of ...

In order to understand individual competitiveness developed by sharing of individual resources of partners inassociation, this study integrates theories from international business (Dunning, 1993), international marketing(Douglas and Craig, 2006) and strategic marketing (Holm and Sharma, 2006). A model to test the dependence ofcompetitiveness variable on innovation in marketing based on mutual use of individual resources by partner firms inassociation is presented.2.0 Theoretical BackgroundSome of the routes for strategic entry of firms into international markets are exporting, licensing, franchising, jointventures or acquisitions (Dacin et al., 2007). The entry of a firm in foreign markets is directly linked to suchinitiatives (Shrader, 2001). Research suggests the strategic management of dynamic markets should take an approachbased on the marketing mix and customer value proposition (Srivastava et al., 2001; Miles and Darroch, 2006).Success is related to optimum utilization of resources available to a firm for competitively fulfilling needs of itscustomers (Frank and D‘Souza, 2004). The dominant assumption of success of both international and local firms isunderstood from resource based view (Das and Teng, 2000). Academic literature on innovation by competitivenesshas not paid attention to combining resources of two types of firms being studied. The objective of this research is toempirically examine and analyse the variables that influence competitiveness by interdependence of resources.Various types of resources are generated in an organization as a by-product of the customer value creation process(Ulaga and Chacour, 2001; Gronroos, 2004). Capability to use relationships as a source of knowledge forunderstanding customers and creating value is a tool for developing competitiveness (Srivastava et al., 2001).Strength to market combined with competitive products from international firms becomes the foundation for itsalliances and relationships with small and medium sized local firms (Luo, 2000). As observed by Peng (2001)competitiveness of a firm depends on its resourcefulness and relationships in the local market. Peng and Heath(1996) identified business exchanges and interdependence of firms for resources as basis of competitiveness.Role of Business RelationshipsBusiness nature of relationship fulfills the inadequacy of international firms to operate in competitive markets, andsupports shortfall of resources for local firms to compete (Madhok, 2006). Guanxi in Chinese context, Kankei inJapanese context and Inmak in Korean context are some examples that explain the role of relationships andcriticality of their benefits to firms seeking success in markets away from their domestic territory (Hitt et al., 2002).Authors such as Narayandas and Rangan (2004) and Hitt et al., (2002) suggest that both international and local firmsget the benefit of associating in the market space based on mutual sharing of individual resources. Both firms aspartners in relationship mutually leverage on the individual strengths of the other partner (Ireland et al., 2002).Resourcefulness to provide knowledge and relationships of local firms benefit international firms and local firmsbenefit from competitiveness of offerings with marketing strength offered by international firms (Freeman and Reid,2006).The objective of a firm is to create wealth for its stakeholders (Certo et al., 2001). Competitiveness in the products orservices offered by a firm to its customers also depends on the way in which they are offered (Srivastava et al.,1998). Local firms benefit from competitive offerings made by international firms and international firms expandbased on the resources and relationships offered by local firms as agents (Dacin et al., 1997). Individual strengths ofpartners are mutually beneficial to the association as it allows them to innovatively fulfill and deliver value to theirset of customers (Dewett and Jones, 2001).Mutually Beneficial RelationshipsAssociating with international firms cultivates a notion of being competitive for local firms (Lee et al., 2001;Burgees and Steenkamp, 2006) and market information provided by local firm allows international firms tosuccessfully compete (Dunning, 1988). The opportunity recognition ability of local firms with efficient after-salesservices and strong marketing support was studied by Anderson (1982). Research conducted by Heberer (2003) wasfocused on the strategic role played by small local firms in China and Vietnam in transforming the social andpolitical environment. International firms based on their financial and technological strengths provide an opportunityto local firms to generate wealth by competitively positioning them in local markets.