Influential factors in becoming socially embedded in low-income markets

Low-income markets represent a new but emerging field of research in international strategy. Because these markets remain mostly unexplored and most companies are unaware of them, it is argued that the development of embedded ties and alliances with traditional and non-traditional partners is critical in order to better understand customer needs and market characteristics. Following this logic, the purpose of this paper is to explore the antecedents and consequences of becoming socially embedded in low-income markets. Using a multiple-case inductive analysis of business ventures (i.e. CEMEX, Hindustan Lever, Tetra Pak, Nike and a Spanish multinational firm) and the development of embedded ties and partnerships in this context, we propose an emergent theoretical framework that explains the influential factors for developing such networks. our findings suggest that a firm has a bigger incentive to build embedded ties and partnerships under three conditions: an under-developed market-oriented system; the high psychic distance ofa firm in regard to low-income markets; and the degree of personalised co-creation experiences offbred by the firm. In addition, we observe that becoming socially embedded contributes to creating a contextual competitive advantage. Finally, an important implication for total value creation emerges: as the development of networks contributes to building capabilities beyond the firm's boundaries, firms that have developed the ability to become socially embedded may create more total value - social and economic - and have a greater positive impact in a social context than those that have not developed this ability.