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HOW CAN MULTINATIONALS IMPROVE INTER-REGIONAL EXPANSION? THE CASE OF SPRINGBOARD SUBSIDIARIES FOR LATIN AMERICA
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This article analyses a model of interregional expansion by using springboard subsidiaries. Being located in Spain, these units can facilitate the expansion of multinational companies in Latin America by providing part of the experiential knowledge required to succeed in the region, yet avoiding the initial requirement for investment. Based upon the expansion strategy of five European multinational firms, we develop an inductive model in which headquarters functions –coordination and knowledge creation processes - are distributed between the parent company and the springboard subsidiary along an accumulative process of capabilities. This model reflects the type and degree of commitment of both actors in each stage: whereas in the initial phase the springboard subsidiary and the headquarters act as substitutes, they execute complementary functions with the development of the local network in the target region. By demonstrating how a springboard subsidiary can help to align control to context, the model offers a tool for strategic analysis that helps avoid potential value destruction by parent companies.
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