Strategic choices of firms in expanding overseas business

Abstract

Based on a case study of Pfizer’s production scope evolution in China from 1993 to 2002, we propose that MNCs usually have to face dual pressures of keeping integration among global businesses on the one hand, and remaining responsive to local market conditions on the other. When there is large discrepancy between the two, due to the bounded rationality of the decision-makers, the development paths of the subsidiaries are likely to exhibit recursive pattern, instead of the sequential mode as suggested in the extant literature. On the other hand, we argue that companies can make strategic choices to facilitate the development of their overseas subsidiaries. By the adjustment of the strategic parameters pertaining to the content and processes of their development paths, companies can accumulate knowledge about the local market and strike a balance between the dual pressures they have to face. The implication of our study for the indigenous Chinese companies in their international expansion is that when facing unfamiliar business environment in overseas market, paying attention to the idiosyncratic local market condition and keeping strategic flexibility are pivotal to their success.

摘要

通过对辉瑞制药中国公司在 1993 到 2002 年期间在华生产范围发展路径的描述和分析, 提出两个观点。 一是在跨国经营中?业通常面临保持公司在全球的业务整合以及适应当地市场具体条件的双重压力, 当两者之间存在较大差异时, 由于决策者的认知受有限理性的制约, 海外子公司的业务并不会按现有文献中所提出的按母公司已有业务从强到弱顺序发展, 而是呈现迂回发展的路径。 二是, 业可以通过对战略变量的参数选择来调节其海外子公司的业务发展, 而这样的参数调节过程有助于企业通过试探逐渐积累关于当地市场的知识, 从而在跨国经营的双重压力中获取平衡。 对中国企业开展国际化经营提供的启示是: 当企业在海外扩张中面临陌生的环境时, 对当地市场的特性给予足够的关注并保持战略上的灵活性是取得成功的关键。