The possibilities a subsidiary gives for further growth – a case study

Abstract

When it comes to internationalization there is a lot of theories company could follow. One of the many topics that is discussed in these theories regarding the internationalization of firm is the entry mode, and different entry modes have different level of control. Depending on how much control the company wants, its previous experience and how many internal resources it has, are crucial factors for what entry mode a company decided to enter a new market with. Previous research has focused much on the entry mode, and not as much on the periods before and after the market is entered. What this thesis seeks to explore is how a foreign subsidiary can have impact on the company´s international distribution and growth. A unique case company that owns nearly the whole value chain is used in this thesis as an example since it recently established a foreign subsidiary in Germany. The fact that it is a small company from a small place in Norway, makes the company’s more impressive. It is a very competitive industry, so to use a company such as this case company is very interesting because it has a lot of history, knowledge, experience in addition to internal resources that gives the company the possibilities for big production capacity.

A qualitative study was adapted for this thesis to explore the factors that can give companies several possibilities. The case study included semi-structured interviews with a selected number of key informants from the case company and the foreign subsidiary. The key informants were asked about four different topics; why the company chose to establish a foreign subsidiary, the importance of network throughout the establishment as well as the buildup of the subsidiary, if a foreign subsidiary has any consequences on the competitive advantages and if it makes it easier to establish e-commerce. The interviews revealed important factor to answer all of these topics, and these factors is again giving the answer of the main research question. The conclusion of the research questions is based upon the findings from the sub-questions. All of the research questions are related in one way or another.