Global brands as the name indicates are the companies that operate across national borders. It comes with a set of perks for the host country viz., latest trends, improved quality, job opportunities, advanced technologies, and many more. They offer wider choices to local consumers with superior quality. Does it mean the Global brands are welcomed by everyone? The answer is NO. Local brands do find it difficult to stand against global competitors because they don’t have financial resources, apt marketing, skilled management to match, which can make their position at stake in emerging markets.

Multinational corporations got access to a number of experts to strategize their plans to enter emerging markets, meanwhile, local brands do not have extensive resources to do the same. Many such local brands had taken extreme steps like by requesting the running government to pull trade barriers for survival or support with other resources, or by merging their business to the MNCs and promoting under their banner. Else the last option take by some local companies was selling out and leaving the industry. Does it mean there is no way to survive or to compete with global brands? Most probably some great approaches and preparations might help the local brands to stand comfortably in the emerging market against foreign competition.

Let us discuss a few points which can support local brands to overcome the competition from foreign brands:

Evaluating assets as per the emerging market

In the emerging market, local brands are more acquainted with the pulse of the consumer. Even with planned strategies, foreign companies have to struggle to get into the roots of consumer behaviour in the host country. Global brands bring some advantages of scale, but adapting to local preferences is also important.

By thinking about where their industry falls on the spectrum, local players can begin to get a picture of the strengths and weaknesses of their multinational competitors

But they need to place their industry carefully, and assess the company’s competitive assets and strengths viz., holding a network of distribution, longstanding relationships with government officials which are often unavailable to foreign brands, or selective products to match local tastes which can be difficult to produce cost-effectively by MNCs. Thus, evaluating such assets could make a successful defence for the local players.

Edge over acquaintance with local market, price & government

Global brands can access the emerging market easily but matching the trend can be a crucial step. Being well managed and highly conscious of the quality of the products that it is sometimes difficult to mould it according to the local consumer requirements. Local competitors can, therefore, direct their products to the customers who are specific about the requirements. Despite attracting all the consumers, local brands should target the crowd who are more responsive to their product and appreciate local touch without comparing it with global brands.

MNCs typically operate on a global level by standardizing product characteristics, administrative practices, and even pricing, all of which can hamper their flexibility

In many cases, products designed for premium consumers often aren’t profitable at prices low enough to attract many buyers in emerging markets. Even, if it is required, global brands are unable to lower the prices of their product which can indirectly affect the brand value.  Local brands thus can compete with the price and can take the benefit of the constraints MNCs faces. Local players are well acquainted with government norms and preferred over their global competitors for most of the initiatives.  

Merging or selling; the last option

Many local brands die a slow death due to a lack of insight. The pre-assessment of its strength and reasoning out the capabilities could make the local brands take advance decisions for their business. They should not come to the term of “DO or DIE”. It is always better to look for options rather than competing without proper assets, skills, or management.

Local brands can collaborate with global brands and can make themselves global under it

Even selling off the company can be a solution, rather than running in loss and stressing out the employees, local brands have the option to handover the business to the global competitors when the deal is offered. At the initial stage, you can still get value for your business, but as soon as it runs into loss, nobody would come up with good offers.  Thus, the foresightedness in the business is very important to decide on its fate. While global brands are looking to contribute to global scale economies, local brands are focused to provide their services to particular areas. The competition becomes tough when both brands target the same customers. And with dominating resources, MNCs always get an upper hand to the market. Surviving against the global players is truly a challenge, still, a few local brands have made their mark in the market with their strategies and proved that in the sea, small fishes can survive with big fishes.