The Entry Mode of Overseas Subsidiaries and Global Product Development : Case study of Denso's Italia, Korea, and America subsidiaries

  • KIM Heejin
    The University of Tokyo, Graduate School of Economics

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  • 海外拠点の設立経緯と製品開発機能のグローバル展開 : デンソーの伊・韓・米拠点の事例から
  • カイガイ キョテン ノ セツリツ ケイイ ト セイヒン カイハツ キノウ ノ グローバル テンカイ デンソー ノ イ カン ベイ キョテン ノ ジレイ カラ

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Abstract

Most of the existing literatures of 'global R&D' focus on how to transfer R&D capabilities accumulated in headquarter of a company to its overseas subsidiaries. However, considering that there are various types of entry mode and path to be established to every overseas subsidiary, the direction of R&D capability transfer would be more complex. That is, transferring R&D capability from headquarters to overseas subsidiaries is not the only problem to be solved. This article analyzes the relationship between entry mode of overseas subsidiaries and the patterns of product development globalization. Through the case study of Denso, a Japanese automobile parts supplier, this article shows various patterns and problems of global product development in the company. In detail, the case studies of Denso's overseas subsidiaries in Italia, Korea, and America are introduced. The subsidiaries in these three countries are established by acquisition, merger, and greenfield investment each. Elaboration of the three cases, focusing on how the product development works are divided or specialized between the subsidiaries and the headquarter, shows that entry mode of the subsidiaries determines what kinds of problem they face to rationalize the global product development strategy. Namely, in the case of subsidiaries established by greenfield investment, transferring product development capability from headquarter to overseas subsidiaries is the primary concern for products to satisfy local customers. However, when the subsidiaries are established by M & A, concentrating the product development function of the overseas subsidiaries to the headquarter becomes important for the overall efficiency.

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