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Introduction
Emerging market firms are becoming increasingly credible and vigorous competitors against advanced economy competitors. For much of the twentieth century, advanced economy multinationals dominated the competitive landscape. However, recent decades have witnessed a transformation of this competitive pattern (Ramamurti and Singh, 2009) and emerging economy companies, which used to be input suppliers and usually internationalized only through exports, have become leading multinationals on their own (BCG, 2016). They have built parallel supply chains and, in some cases, acquired well-known advanced economy companies and brands (Madhok and Keyhani, 2012). Some have excelled in technical quality and have become serious contenders (if not world leaders) in international markets (BCG, 2016; Cuervo-Cazurra, Newburry and Park, 2016). This remarkable transformation has resulted in a growing literature analyzing the processes that enabled these companies to become highly competitive in a short time and conquer world markets [see articles in special issues edited by Aguilera et al. (2017), Aulakh (2007), Cuervo-Cazurra (2012), Luo and Tung (2007) and Meyer and Peng (2016); chapters in books edited by Cuervo-Cazurra and Ramamurti (2014), Merchant (2016), Ramamurti and Singh (2009) and Williamson et al. (2013); and managerial books such as Guillén and García-Canal (2012) and Khanna and Palepu (2010)].
Whereas much of the literature has focused on their internationalization process, we aim to contribute to the literature by analyzing how emerging market firms have developed uncommoditizing strategies that enabled them to upgrade their capabilities and demand premium pricing from selling reputable, quality products. Emerging market firms face larger challenges than their advanced economy counterparts because many firms in emerging economies tend to use commoditized strategies, competing on low prices and relatively similar, low-quality products. When these companies expand abroad, many of them continue operating with this commoditized approach to competition and rely on home country comparative advantages to sell products on a low-cost basis. This approach places firms at the mercy of market prices.
In contrast, some emerging market firms have been able to break this price dependence and have used uncommoditizing strategies to build their competitive advantages. We analyze 18 firms in six Latin American countries that have followed these strategies. Many of these companies have not yet gained academic attention but have been able to upgrade their competitive advantages to international levels....