Publication: Value-based localization strategies of automobile subsidiaries in Thailand
Issued Date
2008
Resource Type
Language
eng
File Type
application/pdf
No. of Pages/File Size
34212 bytes
Rights
Mahidol University
Rights Holder(s)
Emerald Group
Bibliographic Citation
International Journal of Emerging Markets. Vol.3, No.2 (2008), 140-162.
Suggested Citation
Phallapa Petison, Johri, Lalit M. Value-based localization strategies of automobile subsidiaries in Thailand. International Journal of Emerging Markets. Vol.3, No.2 (2008), 140-162.. Retrieved from: https://repository.li.mahidol.ac.th/handle/20.500.14594/3122
Research Projects
Organizational Units
Authors
Journal Issue
Thesis
Title
Value-based localization strategies of automobile subsidiaries in Thailand
Author(s)
Other Contributor(s)
Abstract
Purpose To analyze the scope of localization strategies and corresponding benefits of these strategies to
subsidiaries of international companies in the automobile industry in Thailand.
Design/methodology/approach The authors have adopted the case research method to investigate
localization strategies of subsidiaries of seven companies (Toyota, Hino, Honda, Isuzu, DaimlerChrysler,
BMW, and Auto Alliance) as well as 14 of their dealers and suppliers in Thailand. The information was
gathered by conducting in-depth multiple interviews with 120 local and expatriate employees at various
levels in the organizations; by referring to annual reports, policy documents and internal reports of these
companies; and by observation during plant visits.
Findings Contrary to the belief that international companies implement localization strategies to simply
match the local market environment, it was found that these companies implement a wide range of
localization strategies to achieve multiple benefits. The paper identifies nine areas of localization:
localization of strategic decision making; building and exploiting the local knowledge pool; deployment
of local human resources; localization of R&D; localization of products; use of local supplier networks;
adaptations to manufacturing processes; local deployment of subsidiary profits; and localization of
corporate image. These localization strategies are not just based on the principle of 3cost-based
localization4 but are based on 3value-based localization.4 These strategies work in tandem and create
value through a system of multiple benefits, such as managements' ability to comprehend and deal with
uncertainty in the operating environment; make informed decisions to respond to challenges in developing
efficient local assembly and marketing systems; cost reduction; higher degree of commitments by local
employees; product customization and acceptance; and greater brand equity and image as a good
corporate citizen.
Practical implications Based on concrete illustrations of seven companies, this study identifies nine
distinct areas for planning and implementing localization strategies and their corresponding benefits. The
managers of subsidiaries can benefit by focusing their localization efforts in these areas to gain maximum
advantage from host country context and then translate these advantages into a competitive international
strategy. Originality/value CEOs of subsidiaries in emerging markets can learn how to build and harness local
advantages for global competitiveness by implementing a wide range of localization strategies.