Leveraging domestic and foreign learning to develop marketing capabilities: The case of the Chinese company Goodbaby

Purpose The purpose of this paper is to explore the role of different learning sources in the process of capability building of Chinese firms (CFs) approaching international markets. Design/methodology/approach The paper is based on the case study of the company “Goodbaby.” The primary data sources are two semi-structured interviews with one of the firm’s managers, which have been triangulated with point of sale visits, interviews with industry experts, and secondary data such as corporate records, patent and trademark data, industry reports and news articles. Findings Both the home-country and foreign markets act as sources of learning to support the development of CFs’ marketing capabilities. Learning at home is triggered by the complexity of the national market and the exposure to foreign entrants. Foreign learning is stimulated by the relationships with leading foreign partners and the exposure to advanced final markets. Moreover, each learning source has a positive effect on the development of CFs’ marketing capabilities in both market contexts in which they compete, i.e. the home-market and international markets. Practical implications CFs’ managers should be simultaneously receptive to the domestic and foreign contexts, as both may support the development of marketing capabilities. CFs’ managers should recognize the learning opportunities embedded in each of these contexts, and identify the markets where these can be effectively redeployed. Originality/value The authors distinguish between different sources of learning in the context of CFs’ internationalization, and explore their triggering factors and their role in the development of an underinvestigated type of capabilities, i.e. the marketing capabilities

Navigating the purchasing power gap in new product development in multinational corporations

Multinational corporations (MNCs) face a significant purchasing power gap of customers between developed and emerging economies. In R&D intensive industries making physical products, MNCs can benefit from economies of scale. Therefore, managers strive to achieve a product standardization–adaptation (S-A) balance when navigating the purchasing power gap. Through focusing on five MNCs headquartered in developed countries, I examined how MNCs can achieve such a balance through new product development (NPD). I found that (1) an S-A balance can be achieved through three NPD strategies (product simplification, product retaining, and reverse innovation); (2) managers need to take into account five key factors when choosing NPD strategies (product complexity, product modularity, brand strategy, position in local competition, and internal technical standards); and (3) the NPD strategies can be implemented through structural separation, temporal separation, and a shared value. This research reveals the complexity of achieving an S-A balance when managers navigate the purchasing power gap in NPD. Different NPD strategies have certain advantages and shortcomings. High product complexity and product modularity can serve as favorable conditions for a product simplification strategy. A brand strategy of leading-edge technologies can serve as an adverse condition for a product retaining strategy. Strong local competitors in emerging markets can be a motivation for a reverse innovation strategy, while stringent internal standards for safety can be an adverse condition. This research also reveals the nuances of implementation of NPD strategies in terms of managing innovation and refinement activities. MNCs may need temporal separation when adopting both downhill and uphill NPD strategies