Tapping into Emerging Markets: EMNEs’ Strategies for Innovation Capability Building

This article explores EMNEs’innovation capability building in emerging markets.The paper provides a longitudinal account of how theBrazilian cosmetics firm Natura transitioned fromscant to ample innovation resources and processes.Building on the institution-based view and theresource-based view, we explain how EMNEs’ innova-tion capability building is anchored in open innovationand collaborative nonmarket strategies. The paperreveals a unique pattern of innovation capability build-ing based on a combination of local and global openinnovation processes and harnessing the country char-acteristics over time. It is shown how combining openinnovation and collaborative nonmarket strategies canhelp mitigate weak formal and informal institutions inemerging markets. The study offers an integratedframework explaining innovation capability buildingand the effects on the institutional setting.