“Creating sustainable advantage in the context of an emerging market: organizational, networking and marketing capabilities of Russian firms”
The contribution and newness of the proposed study stems from the history of the institutional transition of Russian economy. The economic reforms launched in 1990s have turned the previously centrally planned economy into a market-based one. The increasing availability of the branded products in the market, rapid fragmentation of demand and tightening international competition turned the established rules of survival into fierce pursuit for developing new sources of competitive advantage, and as a result, have changed the entire logic of business. The new market-based economy brought competition from the Western market economies and demanded quick adaptation to new rules of the game, where competitive advantage stemmed from innovation and meeting the needs of highly specific market segments. The tightening market competition also had clear implications for the prevailing business philosophies, shifting the primary focus of business from operational efficiency to effectiveness in serving the newly fragmented customer needs.
In this study, we explore implications of this shift towards a market economy for Russian companies both at the level of a firm and at the level of consumer perception.
Despite growing interest to Russian economy over the transition period (1990-2014), existing studies are just trying to shed some light on the changing processes and their outcomes. There is lack of studies that explore the firms' adaptation to the changing institutional and industry/network environments. However, existing literature suggests that firm's behavior as strategic response to the institutional environment in an economy should be a key focus of research. The effectiveness and particularly long-term success of Russian firms thus depend on what they have learned over the transition period. What are the core capabilities they have developed? What is the planning horizon they have in mind by developing these capabilities? Are these capabilities helping Russian firms to be prepared for the new upcoming challenges? Does the market perceive these capabilities as characteristics of sustainable advantage? Has this transition period been used enough to explore the opportunities besides just exploiting emerging market potential? Answers to these questions add value of the study. Moreover, these questions were substantially understudied and not properly covered by existing research.