Global firms often work with a
number or partners in order to move their products into multiple markets.
Global firms use subsidiaries to help them promote and distribute their
products. Research by Homburg, et. al. (2012) seeks to categorize the varying
types of firms available on the market to help multinational organizations do a
better job at managing across countries, cultures, and markets. Their research finds five different types of
firms that have their own benefits and detractors.
Global firms attempt to maintain
competitiveness by using subsidiaries to create effective international reach.
These firms are more aligned with regional and local differences in market
characteristics. Problems result when global marketing loses a level of
efficiency and effectiveness in the development of methods of managing these
multiple distribution fingers.
Drawing from configuration theory
of organizations it is possible to use subsidiary archetypes to understand the
varying nature of firms. The majority of
marketing researchers have advocated for additional customization but this can
create difficulties in global management and in turn impact sales. Global marketing requires a different way of
viewing subsidiary management.
It is possible that moving beyond subsidiary
characteristics to find value-added functions helps to create efficient
archetypes. These archetypes enhance the effectiveness of decision-makers to
make strategic considerations due to their ability to conceptualize complex
information. Knowing how each type of firm can help in the branding and
distribution of products is helpful in developing efficiencies.
The research used three steps to categorize firms:
-Conceptual Domains: Value-added scope,
influence, and competence are common.
-Core Domain
Constructions: Structure, subsidiary size, value-added scope, strategy, strategic
influence, strategic competence, strategic importance, etc…
-Cluster Descriptive
Variables: Performance, environment, communication, coordination, etc…
In this study they used surveys and random samples of
multinational companies across various service sectors. They were able to
categorize a variety of different market clusters to help define each type of
company. Knowing cluster characteristics should encourage managers to think
more strategically about which types of firms they are using and why they are
using them for global and regional marketing. They are as follows:
Saturated
Administrators: These are the larger
firms that have done well in the beginning of the globalization process. They
are moderately effective but maintain name brand and strong purchasing power.
They have difficulty effectively making their way into local markets and are
relied on by a majority of companies seeking a global presence.
Universal Champs:
These are high performing firms that focus on certain industries in which they
can maximize profits. They are seen as effective and seem to do well with high
value added products/services. Due to
the nature of the customers they seek wealthier nations where the economic
system is stable and maintain purchasing power.
Important Dependents:
They are strategically important but
small. They exist in a number of Asian countries and are relatively passive but
have high value-added services. They provide local access to markets other
firms may have a hard time reaching.
Promising Aspirants:
These are small firms that are self-sufficient
and work out of an entrepreneurial approach. They are beneficial in terms of
their ability to work in fast growing markets that require cognitive
flexibility. They offer generally low value-added services but work well in
risky markets.
Flexible Implementers:
Small and young clusters. Very few value
added activities with low influence and low competence. They move products and
services along to local markets with high standardization.
Homburg, C., et.al. (2012) Ensuring
international competitiveness: a configurative approach to foreign marketing
subsidiaries. Journal of the Academy of
Marketing Science, 40 (2).
