Chapter 6, Case 3 Rhodes Industries
1. Would the subsidiaries still be competitive and adaptive in local markets if forced to coordinate with other subsidiaries around the world?
RI is considering using the globalization strategy to help increase their efficiencies and profits. They have realized that they are using breakthrough technologies in some subsidiaries and not in others. Since subsidiaries are basically run as completely different companies, they are refusing to lower their profits to increase the overall profits of the company. In order to answer this question, we need to look at the types of products RI sells. The list of products and services sold by RI include pipe, glass, sealants, coatings, cleaning equipment, truck parts, light bulbs, switchboards, computer chips, and resistors, capacitors, glassware, paper, envelopes, pencils, and pens. Since the company sells items that are in high demand in any developed country, I don’t see any problems for them to standardize their manufacturing and development of products. However, it’s important for some countries to feel like the company part of their community, they should also strive to conduct business with local suppliers. For example, in America, it’s not a big deal of Americans to purchase products that were manufactured in other states or countries (however, I do think that is changing slowly). On the other hand, countries in Europe do not like large companies opening their stores due to the fear of putting the smaller businesses out of business. I think the standardization will help raise profits in the other subsidiaries with the help of technology sharing, with an example being the light bulbs technology. Richard Parsons, CEO of Time Warner Cable stated in an interview by the University of Pennsylvania that “Such forces pushing economies of scale can be seen not only in media, but in many industries, including automobiles, telecommunications, and computers. These are the...
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