Question

Why is a leading US MNE such as GE afraid of emerging multinationals from emerging economies?

Answer 1

US MNE such as GE have to consider new Giants from emerging countries in their strategies. The reverse innovation is very cheap and efficient. It permits to focus research of technologies on cheaper and very successful product that will have a very great market, And if the product is competitive in emerging countries, it can be a low-cost product in developed economies.Actually, in recession period, consumers prefer to spend their money in cheap product and good quality product. The trend is to leave medium quality such as medium prices product. If the invest in high quality or luxury product, the first price market is a success (low-cost, discount...). Consequently, it becomes a competitive product on different markets. So, if US MNE or GE don’t take this opportunity, new competitors from around the world may revesr engineer their product and make good profit out of it leaving them in losses due to research and development cost.

please do rate me and mention doubts, if any, in the comments section.