Network Knowledge in International Business

Network Knowledge in International Business

New Horizons in International Business series

Edited by Sarianna M. Lundan

This book focuses on current cutting-edge research concerning the increasing strategic importance of subsidiary networks to the multinational firm. It combines contributions from three major related areas of inquiry: the changing theoretical conception of networks and the structure of the multinational firm, the importance of spillovers and agglomeration economies related to multinational investments, and the management of the flow of information and knowledge from headquarters to subsidiaries and vice versa.

Chapter 13: The corporate supplier network within the European personal computer industry

Denise Tsang

Subjects: business and management, international business


Chapter 13 21/6/02 11:20 AM Page 1 13. The corporate supplier network within the European personal computer industry Denise Tsang The objective of this chapter is to illuminate the impact of core cultural values on the component capability of personal computer firms, which subsequently determine US, Japanese and Taiwanese firms’ areas of specialization within the corporate supplier network. The corporate supplier network describes a set of linkages in relation to the flow of intermediate products, which are the factor inputs used in producing final products. Two types of corporate supplier network can be discerned in the European personal computer industry. The first type relates to firms that pursue disintegrated linkage and co-ordinate their upstream components supply completely through independent suppliers in Europe and the Far East (e.g. Japan, Korea, Taiwan and China). In other words, the European manufacturing plants undertake a considerable amount of inter-firm procurement, which is incorporated in the European data of electronic component imports. The second type is integrated linkage where firms integrate back into some aspects of component production; the associated intra-firm procurement thus represents the flow of captively produced intermediate products. Figure 13.1 illustrates the corporate supplier network of an integrated firm. Approximately 60 per cent of the European personal computer market was shared by eight multinational firms in early 2000, namely Compaq, Fujitsu Siemens, Dell, Hewlett-Packard, IBM, NEC, Toshiba and Acer.1 They have all established manufacturing operations in Europe to assemble personal systems under their own brand names between 1982 and 1999. For...

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