Ensuring international competitiveness: a configurative approach to foreign marketing subsidiaries

Increasingly, multinational companies (MNCs) operate their global marketing activities through foreign marketing subsidiaries. However, this practice presents MNCs with the challenge of efficiently and effectively managing a portfolio of subsidiaries with numerous diverging characteristics. To reduce the complexity of managing such a portfolio and to increase MNCs’ and subsidiaries’ performance, we provide MNCs with a marketing subsidiary taxonomy that enables them to understand and manage different subsidiary types. Analysis of a cross-sectional, multi-country, multiple-informant dataset generated five marketing subsidiary clusters, which are distinct in the structural characteristics of size, age, and value-added scope and the strategic characteristics of strategic influence, strategic competence, and strategic importance. Subsidiary performance outcomes, subsidiary environmental conditions including important marketing aspects (e.g., customer characteristics), and headquarters’ coordination and communication mechanisms enrich our cluster description and yield a holistic picture of our marketing subsidiary taxonomy. The empirical results provide significant theoretical and managerial implications.