How Resource-poor Firms Survive and Thrive: The Story of Successful Chinese Multinationals

This chapter outlines a dynamic model of compositional strategic advantage for resource-poor firms where the attractiveness of the product offering in terms of scope and perceived value-to-price ratio identifies a number of elementary compositional strategies. A resource-poor firm can establish a compositional strategy composed of one or more of these elementary compositional strategies. It is argued that how the compositional strategic advantage is formed by three indispensable factors of aspiration (asymmetry between ambition and position), attitude (be “ALERT” to change), and action (use the asymmetry to create advantage). It is explained how the underlying theoretical rationales are particularly useful to understand the successful expansion of multinational Chinese firms and coinciding with basic cultural values.