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How does a foreign subsidiary’s differentiation strategy fit competitive dynamics and mandate?
Linnaeus University, School of Business and Economics, Department of Marketing. (Marknadsföring)ORCID iD: 0000-0003-0455-0643
2016 (English)In: European Business Review, ISSN 0955-534X, E-ISSN 1758-7107, Vol. 28, no 6, p. 690-708Article in journal (Refereed) Published
Abstract [en]

Purpose – Drawing on the contingency perspective of strategy, the purpose of this paper is to extendcurrent understanding of fit between a differentiation strategy of the industrial firm’s foreignsubsidiary and key contextual boundaries.

Design/methodology/approach – A conceptual framework is developed in which a differentiationstrategy involves the complementary approaches of innovativeness and customer responsiveness. The key boundaries consist of local competitive dynamics and the value-adding mandate assigned to thesubsidiary. Detailed features of four types of differentiation strategies are identified by analysingstrategies applied by subsidiaries of industrial firms operating on the US market.

Findings – Four propositions are developed regarding alignment between strategy types and theboundaries. Relationships are proposed regarding a strategy type and a context specified by rivalry/relational competitive dynamics, and a broad/narrow value-adding mandate.

Research limitations/implications – The conceptual framework and the propositions may betested by analysing statistical data on industrial firms’ subsidiaries operating in several host countries.

Practical implications – To increase a foreign subsidiary’s contribution to the global competitiveness ofan industrial firm, an awareness of the boundaries to the subsidiary’s strategy of differentiation that mayhamper the subsidiary’s performance is essential.

Originality/value – The conceptual framework, and the propositions, contributes to literature on theindustrial firm’s global strategy because it focuses on subsidiary strategy and extends presentunderstanding of the mechanisms that drive the effectiveness of a foreign subsidiary’s differentiation strategy.

Place, publisher, year, edition, pages
Emerald Group Publishing Limited, 2016. Vol. 28, no 6, p. 690-708
Keywords [en]
Differentiation, Subsidiary, Strategy, Fit, Competitive dynamics, Value-adding
National Category
Business Administration
Research subject
Economy, Business administration
Identifiers
URN: urn:nbn:se:lnu:diva-59316DOI: 10.1108/EBR-08-2016-0107ISI: 000386792300005Scopus ID: 2-s2.0-84992035821OAI: oai:DiVA.org:lnu-59316DiVA, id: diva2:1058135
Available from: 2016-12-20 Created: 2016-12-20 Last updated: 2018-05-17Bibliographically approved

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Pehrsson, Anders

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CiteExportLink to record
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Citation style
  • apa
  • harvard1
  • ieee
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  • vancouver
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More styles
Language
  • de-DE
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  • nn-NB
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  • Other locale
More languages
Output format
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  • text
  • asciidoc
  • rtf