The trick is to learn to innovate and manage quality while remaining nimble.(John Jullens) In just a sentence, John Jullens explains the key to success when Emerging Market Multinational Enterprises internationalise, and how the flexibility and innovation associated with EMMEs is exactly why they have what it takes to take over the world, per say. Whether they are moving reactively, or proactively, EMMEs have the advantage over many developed markets due to the opportunities that are presenting themselves in recent times, such as having a new market to target, having access to a cheap and skilled workforce, and possible partnerships in the new country. But with these opportunities, come great risks and challenges, such as competition, psychic distance, and initiating sustainable strategies; challenges that must be dealt with through thorough strategy and planning, so as to achieve the potential these Enterprises possess.

EMMEs are enterprises from Emerging economies, that engage in foreign direct investment (FDI) and owns, or in some ways controls, value adding assets in more than one country (Dunning & Lundan, 2008:3). They are emerging by virtue of their fast economic growth (http://www.forbes.com/2010/05/27/winning-in-emerging-markets-opinions-book-excerpts-khanna-palepu.html), and according to the Boston Consulting group, they are using 5 basic strategies to strategically take on the world. (Lecture slides)
- Taking brands from local to global
- Transform local engineering excellence to innovation on a global scale
- Achieve global leadership with a ‘narrow’ product line
- Take advantage of natural resources in your home market and boost this with top marketing and distribution
- Develop a new or better business model

EMMEs are starting to take their products into developed international markets through careful implementation of Foreign Direct Investment. Based on the article "(Accenture, 2007), Rise of the Multi-polar World", their have been 3 drivers behind the sudden rise of emerging markets;
Technology, which has broken down the barriers of communication and distance, and allowed emerging economies to gain exposure to the developed world.
Economic Openness, which saw the breaking down of trade barriers, and a shift towards economic liberalization, with governments integrating their policies towards certain trade agreements, allowing multinationals to export and invest in FDI’s in their countries, leading to more economic growth.
Expansion strategies by Multinationals, with many of these enterprises reaching out to emerging economies to perform many of their activities, taking advantage of their raw materials, low labour costs and capital.
EMMEs then began to export to these developed economies and with this transition comes a complete contradiction to Economic Theory, which should be seeing richer countries exporting to poorer ones, and the flow of FDIs flowing similarly in the same direction, and with it, a high level of managerial and entrepreneurial skill. (http://www.economist.com/node/10498492&arubalp=4660316c-3d2b-47c5-bdca-f894fb2d6b)

With these trends, and the way the market is turning, many opportunities are presenting themselves for EMMEs. One opportunity is having a completely New Market to target their products at. Initially, you would look at minimising the psychic distance, by internationalising into markets 'similar' to that of their own (psychic distance reference), sequentially targeting their internationalisation with a low commitment strategy (exporting), to high commitment (Foreign Direct Investment). Cuervo-Cazurra revealed in 2007, 3 approaches to market entry;
Marketing and sales subsidiaries in all countries first
Production subsidiaries first in all countries, which, as proposed by Luo and Tung (2007), can be achieved by 'springboarding' into international markets, which is also a way of overcoming latecomer status into the market.
Marketing subsidiaries first in some countries, and production subsidiaries first in others.
Once a market has been penetrated, EMMEs have the ability to target more profitable industry segments. They have the ability to compete with the larger firms, thanks to the globalisation of the worlds market, with possibilities seeming boundless thanks to being drawn into the global economy. (Journal of World Business December 2007, Vol.42(4):369–383, doi:10.1016/j.jwb.2007.06.001). Having a completely New Market to target allows for greater potential, growth, and larger profits

Perhaps the greatest of EMMEs opportunities is to take advantage of both cheap labour and a skilled workforce. This is a cost advantage that can be exploited and can give them the competitive advantage over their competition. This advantage can be capitalised on by dealing in one country but adhering to the rules of another. This is seen as many products are manufactured off shore, at extremely low rates, much lower than the legal minimum wage of the country the item is eventually sold to, and then shipped off to be sold offshore, as is seen with many EMMEs in China, India and Brazil (Farok J. Contractor, 2013)
The access to skilled workers allows the EMMEs to compete on all levels, as they can provide a cheap product, without compromising the integral quality of the product. Particularly in recent decades, the capabilities of technologists in emerging markets has come to rival those in the developed nations. World-class talent, who have been shipped off to receive a first-class education, are returning to their emerging economies, have access to world-class facilities, and are hired at a lower salary (Farok J. Contractor, 2013)
Due to this cheap labour, other companies understandably take advantage of this, by delegating many of their business activities, including Research and Development, to these Emerging Markets. This means that EMMEs can learn and eventually leverage their own capabilities and extend them to more profitable portions of the value chain. (Contractor, F.J. 2012).

Another opportunity of EMMEs is the Family Conglomerates, which sees many of the enterprises either family owned or family controlled. This allows for solid networking and a strong set of relationships. It allows them to make decisions quickly, and often receive cheap finance from the state banks (The Economist, 2008) They are highly diversified and control supplies and employment, as is seen in places such as South Korea, with the chaebols, and in Latin America with the grupos).
They are successful through the implementation of the three 'C's' also- control, coordination and configuration. This states that they have complete control over the operational and business activities of the enterprise, coordinate all business activities internally, which can also give the company a competitive advantage, especially if they possess technology, or a well known brand that competitors can't use (Silvio Contessi, date unknown), and configure the business the way they please, in terms of structure, and how it is run.
Another opportunity with these family conglomerates is the attraction for larger companies looking to invest in emerging economies, wanting to partner with these conglomerates. As these companies look to benefit from the advantages associated with these conglomerates, the conglomerates themselves can take advantage of such a partnership, such as greater experience, profits, and knowledge. (Lecture slides, week 5)

Unfortunately, with opportunities comes challenges, with one such being, the rapid growth that saw Emerging Market Multinational Enterprises infiltrate its way into the current market, isn't sustainable in the long term, as can be seen with the recent decline in India and China's economy. Whilst it is important to grow, the focus towards sustainable strategies, such as brand management and Quality Control, cannot be shunned for short term growth. This is a major challenge for EMMEs, as they find the balance between solidifying the long term sustainability of its enterprise, so that when the business matures, they remain relevant; and continuing to grow with the market.

Competition; especially competition from local firms, is perhaps the most difficult challenge to overcome. Local firms are better suited to the home markets demands, already have a solid knowledge of the market and its people, and adapt more swiftly to changing conditions. They are usually more prepared to take risks, as they don't have as higher stakes to lose, and are often more calculated in their approach, due to the knowledge they already possess. (Must try harder article) It is important for EMMEs to develop extremely efficient business capabilities from the outset, so that when competition from developed multinational enterprises escalates, they have a solid core structure to fall back on. BYD is a great example of how a short term vision can end poorly. After dominating the global battery industry, they decided to diversify their product, overestimated the markets growth, and sales fell horrifically. This was due to the poor standards set on its business capabilities, which saw little effort put towards product development and quality management.
The big players have been in the market, sometimes for decades and it can be extremely difficult to compete against these business's who have built strong brands, and established trust relationships with both retailers and customers. (Journal of World Business December 2007, Vol.42(4):369–383, doi:10.1016/j.jwb.2007.06.001) This is becoming a major challenge, especially as the Emerging Market boom starts to cease. No longer are developed multinationals unaware of the threats EMMEs possess, and they have plans in place to compete with them in areas EMMEs once stood unopposed. So EMMEs now compete against these giants as well as other EMMEs in terms of costs advantages, innovation and overall competitive advantage.

Psychic Distance is a major challenge for EMMEs, which are the perceived differences between the home country, and the international countries they are dealing with. They can be grouped into 4 groups; (Daniels, 2013)
Linguistic And translation difficulties
Cultural factors, which includes societal norms, values and customs.
Economic situation, which can include local conditions and competition, amongst other things.
Political and Legal system, which can include government stability, taxation levels and legal protection
Maintaining control can be extremely difficult when dealing with psychic distance. As is the question that is risen when studying the 'O' aspect of the OLI framework, is whether you genuinely gain Ownership advantages when internationalising, or whether you realistically develop Ownership disadvantages. (Lecture slides)

These challenges can be overcome. Psychic Distance can be avoided with a well implemented monitoring system, so that standards are controlled, people are hired to overcome language and cultural issues, and they research the market for trends and issues that may arise.
With a thorough and in-depth research of the market, and it's demand, competition can be turned into a positive, by driving innovation and hard work. They can stem ideas, and show the business how they can challenge and improve on all fronts.
The reputation of the brand must be ensured as growth happens, and if this occurs, there will be a fine balance between the two, allowing the business to survive and challenge when it faces tough times.

All in all, opportunities such as having a new market to target, having access to a cheap and skilled workforce, and possible partnerships in the new country, show what advantages are on offer for EMMEs when strategic planning is implemented. If the challenges, such as competition, psychic distance, and initiating sustainable strategies are quelled, then the possibilities for EMMEs are endless, and they can challenge Developed market multinational enterprises on all fronts. It's an exciting time for EMMEs and time will tell if they have what it takes to implement their plans successfully enough to make a dent in developed markets when internationalising.

http://www.economist.com/news/business/21586320-ambitions-western-firms-emerging-markets-far-exceed-their-efforts-must-try-harder

•Dunning, J. & Lundan, S. M. 2008. Multinational enterprises and the global economy, Edward Elgar Publishing Limited
Contractor, F.J. (2012a), “7 reasons to expect US manufacturing resurgence”, Yale Global, August. OpenURL Macquarie University
Accenture. (2007). The Rise of the Multi-polar World.
Y.Luo and R.Tung: Journal of International Business Studies Vol. 38 (2007), p. 481
Farok J. Contractor , (2013) "“Punching above their weight”: The sources of competitive advantage for emerging market multinationals", International Journal of Emerging Markets, Vol. 8 Iss: 4, pp.304 - 328 http://www.economist.com/node/10496684 https://research.stlouisfed.org/publications/regional/10/07/multinational.pdf