‘Multilatinas’ Go to China: Two Case Studie s

This chapter explores the globalization challenges faced by multinationals from Latin America (multilatinas), focusing on Embraer and Techint — the two South American firms that best epitomize world-class manufacturing based not only on the intensive use of natural resources, but also on technology and human capital. Specifically, the chapter looks at their experiences in China, and whether or not they have any advantages coming from emerging markets themselves. Among the commonalities the chapter finds between these two firms are excellence at managing institutional relations, supply chains, and the boundaries of the firm. Also important is the clear and articulated global vision of the firms' top management. These firms decided to look internationally while still enjoying domestic protection. By being proactive, they were able to reach quality standards earlier and under a less pressured environment than firms that were forced to adapt quickly to increased local competition following market liberalization in their home countries. When entering other emerging markets like China, their familiarity with institutional voids can serve as an advantage compared to firms from more developed economies. But they will still face the same challenges as other firms regarding technology and governance issues.