Family conglomerates and Western companies in the emerging markets (Essay Sample)

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Family conglomerates and Western companies in the emerging markets
Multinational companies seeking entry into emerging markets cannot overlook massive opportunities provided by family conglomerates. Whether it is well established communication and distribution networks, government support, and knowledge on the local markets or good relationships that family conglomerates enjoy with government officials, they can derive a lot of value from FCs (Kim et al 14). As such, foreign companies need to take into consideration various forms of strategic alliances with family conglomerates including research and development partnerships, joint ventures, supply and licensing agreements, technological exchanges and distribution agreements before they establish investments in emerging markets.
The evolution of family conglomerates at each stage of their growth is influenced by several factors such as their ability to translate market demands into opportunities. Further, family conglomerates enjoy protection from the government in the form of tax incentives, subsidies and special short-term and long-term loans due to their contribution to the overall economy. Other drivers of family conglomerates include their ability to solicit funds from unique sources, ability to form strategic alliances with foreign firms, diversifying into unrelated businesses, and competitive advantage as a result of local knowledge (Kim et al 28). In addition, family conglomerates have powerful employees who possess some sense of loyalty to the company that contribute greatly to their expansion and growth.
Empirically, family conglomerates remains strong due to their massive accumulated wealth. They are likely to be professionally run as the second and third generations inherit them. In order to enjoy a relatively frictionless entry to emerging markets, western firms have to conduct thorough investigation to assess the abilities of family conglomerates, th...