WHY AND HOW AJINOMOTO WINS OVER NESTLÉ IN THE CANNED COFFEE MARKET IN THAILAND: FROM THE PERSPECTIVE OF SUBSIDIARY AUTONOMY LEVEL IN FOOD MNCS
Journal Title: European Journal of Business and Social Sciences - Year 2016, Vol 5, Issue 4
Abstract
In the food industry, according to conventional wisdom, product localization with high local responsiveness is considered the lifeblood of establishing global competitiveness among MNCs. However, there are very few existing clinical studies directly focusing on the question of whether which functions in a food MNC need to be localized in which level of subsidiary autonomy. This research tried to answer the research question above by highlighting critical factors in specific functions and the level of autonomy in decision making based on a detailed case study of Ajinomoto in the canned coffee market in Thailand. An analytical framework that presents seven levels of autonomy in the subsidiary’s decision making is created to investigate the critical factors in each function. The result suggests that not every function in a food MNC should be localized. Product development, marketing and sales functions need a very high level of subsidiary autonomy, and a decision should be made by the subsidiary, except for nutrition requirement, which needs local and headquarters consultations, opposite to the quality control function, in which decision making is mostly done by the headquarters.
Authors and Affiliations
Tanyamai Thinotai| PhD candidate, Graduate School of Economics and Management Tohoku University, Japan. Email: tanyamai@dc.tohoku.ac.jp 27-1 Kawauchi, Aoba-ku, Sendai, Miyagi 980-8576 Japan
Keywords
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