The Role of Subsidiaries in Emerging Markets in Generating Competitive Advantages for Foreign Multinationals: the case of the Brazilian subsidiary of Clarks International

Abstract

The relationship between a multinational and its subsidiaries abroad, according to many studies, is crucial for generating competitive advantages. Therefore, this study aimed to understand the relationship between a shoe company, Clarks International, and its Brazilian subsidiary with an emphasis on generating advantages to the multinational headquarters. Through a single case study, the subsidiary’s capacity for knowledge generation and diffusion was identified, as well as its level of autonomy in relation to the English headquarters. Data analysis indicated that the Brazilian subsidiary generated specific competitive advantages for the foreign multinational due to its close relationship with local suppliers in Brazil and due to its staff’s expertise in developing high quality shoes. It was perceived that the growth of subsidiary autonomy was related to the growth of specific advantages generated for the multinational.

Keywords

• Multinational companies. Subsidiary and multinational relationship. Emerging markets.