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How does a company’s transition from being home oriented to being polycentric(OR thinking of itself as a multinational) result in reduced economies of scale?
Not sure what you mean. I assume the first step is to find an overseas market then decide how it will be serviced eg export, foreign direct investmemt or local licensing.
I was trying to ask that
Is a company likely to lose out on economies of scale in the process of expanding from one country to overseas markets?Generally companies tend to acquire economies of scale by going global. Eg Apple: one set of development costs is spread over huge sales in many countries.
Is a parent-subsidiary relationship same as the parent-SBU relationship referred to in this course?
Or is it that the SBUs are just separate divisions within the parent?‘SBU’ is a general term referring to part of an entity that needs a different strategic approach. For example, Toyota makes both Toyota-branded cars and Lexus-branded cars. These are sold into very different markets with different competitors, buyers etc. They need a different strategic approach eg Toyota might be cost-leader but Lexus differentiation.
Whether Toyota and Lexus are in different subsidiaries or divisions or are both part of one division is rather immaterial. Irrespective of the corporate structure they need different strategies so are different SBUs.
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