Headquarters–subsidiary interaction during the introduction of a value product in India

Schweizer, Roger; Lagerström, Katarina; Jakobsson, Johan

doi:10.1057/s41291-019-00098-8

Cited by 1 publication

(1 citation statement)

References 40 publications

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“…In this case, R&D is conducted at home and focuses on the creation of new, technologically advanced and high-quality products (Buckley and Casson, 2007). More recent evidence, however, suggests that MNCs increasingly develop new products and solutions to serve different market segments within large strategic host emerging markets (Ivarsson and Alvstam, 2017; Jha et al , 2018; Schweizer et al , 2021).…”

Section: Theoretical Background: Multinational Corporations Product D...mentioning

confidence: 99%

Multinationals’ value chain configuration for product diversification in emerging markets: Western firms in China

Franz,

Giroud,

Ivarsson

2023

MBR

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Purpose This study aims to analyse how multinational corporations (MNCs) organise value chain activities to penetrate new market segments. It contributes by expanding traditional decisions regarding the vertical fine-slicing of value chain activities (whether performed internally or externally) and the consideration of resource-sharing decisions (integration or separation) for each value chain function. Design/methodology/approach The authors draw on primary data collected from two case study firms operating in the large emerging Chinese market: Volvo Construction Equipment AB and Epiroc AB. In-depth cases illustrate how foreign MNCs expand into new market segments and simultaneously target both the lower-priced mid-market and the premium segments in the Chinese mining and construction industry. Findings The results reveal that product diversification creates challenges for managers who must oversee new (vertical) value chains, often simultaneously. Beyond geography and modes of governance, managers must decide whether to integrate or separate value chain activities for the new product lines. The study identifies four main strategic choices for firms to address this complexity, focusing on the decision to internalise or externalise (i.e. within or across organisational boundaries) and integrate or separate value chain activities between different product lines. Originality/value This study builds upon the internalisation theory and recent international business contributions that focus on value chain configurations to explain MNCs’ product diversification as a growth strategy in a host emerging market. It also sheds light on the choice of conducting new activities in-house or externally and elucidates firms’ managerial decisions to operationally integrate or separate individual value chain activities. The study provides insights into the drivers explaining managerial decisions to configure value chain activities across product lines and contributes to the growing body of literature on MNC activities in emerging economies by highlighting that product diversification impacts entry mode diversity and resource sharing across units.

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Section: Theoretical Background: Multinational Corporations Product D...mentioning

confidence: 99%

Multinationals’ value chain configuration for product diversification in emerging markets: Western firms in China

Franz,

Giroud,

Ivarsson

2023

MBR

View full text Add to dashboard Cite

show abstract

Headquarters–subsidiary interaction during the introduction of a value product in India

Cited by 1 publication

References 40 publications

Multinationals’ value chain configuration for product diversification in emerging markets: Western firms in China

Multinationals’ value chain configuration for product diversification in emerging markets: Western firms in China

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