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A transaction cost rationale for private branding and its implications for the choice of domestic vs offshore outsourcing

Published on Jan 1, 2009in Journal of International Business Studies 7.72
· DOI :10.1057/palgrave.jibs.8400419
Shih-Fen S. Chen9
Estimated H-index: 9
(UWO: University of Western Ontario)
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Abstract
In this study, I take a transaction cost approach to explore the coincidence of private branding with offshore outsourcing – two retail trends that have attracted substantial attention but have never been analyzed concurrently. Retailers now play an increased role in marketing a product to shoppers, although their marketing efforts are usually specific to the supplier who brands the product. This is called brand specificity, a special case of asset specificity that drives up the cost of conducting the manufacturer–retailer transaction, especially when the parties are located in different nations. With the right to brand a product being shifted from manufacturers to retailers, private branding can eliminate this problem of brand specificity that inflicts a transaction cost penalty on offshore outsourcing, which is why the two seemingly unrelated retail trends coexist. Data obtained from a national chain reveal that the retailer is more likely to brand a product that needs its marketing efforts, but less motivated to outsource the product offshore before putting a private brand on it. These results establish a transaction cost link between private branding and offshore outsourcing, from which important theoretical and practical implications can be drawn.
  • References (54)
  • Citations (24)
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References54
Newest
Published on Oct 8, 2009
Monica L. Miller4
Estimated H-index: 4
Slaves to Fashion is a pioneering cultural history of the black dandy, from his emergence in Enlightenment England to his contemporary incarnations in the cosmopolitan art worlds of London and New York. It is populated by sartorial impresarios such as Julius Soubise, a freed slave who sometimes wore diamond-buckled, red-heeled shoes as he circulated through the social scene of eighteenth-century London, and Yinka Shonibare, a prominent Afro-British artist who not only styles himself as a fop but...
Published on Mar 1, 2005in Journal of International Business Studies 7.72
Shih-Fen S. Chen9
Estimated H-index: 9
(IBS: International Business School, Germany)
Internalization theory suggests that multinational enterprises set up subsidiaries to exploit technology advantages abroad when licensing is too difficult to arrange with indigenous firms. This direct investment vs licensing trade-off, which is built on a business-to-business transaction, does not recognize the linkages with the final products market as a component of transaction cost analysis. By adopting a unilateral perspective on international technology transfer, neither does it consider th...
Published on Feb 1, 2004in Journal of Marketing Research 4.20
Tülin Erdem27
Estimated H-index: 27
(University of California, Berkeley),
Ying Zhao10
Estimated H-index: 10
(HKUST: Hong Kong University of Science and Technology),
Ana Valenzuela11
Estimated H-index: 11
(SFSU: San Francisco State University)
Abstract This article empirically studies consumer choice behavior with respect to store brands in the United States, the United Kingdom, and Spain. Store-brand market shares differ by country and are usually much higher in Europe than in the United States. The authors study the notion that the differential success of store brands in the United States and Europe is the higher brand equity that store brands command in Europe than in the United States. They use a framework based on consumer brand ...
Published on Jan 1, 2004
Gary Gereffi44
Estimated H-index: 44
,
Timothy J. Sturgeon23
Estimated H-index: 23
A cover story in the February 3, 2003 issue of Business Week highlighted the impact of global outsourcing over the past several decades on the quality and quantity of jobs in both developed and developing countries (Engardio, Bernstein, and Kripalani, 2003). The first wave of global outsourcing began in the 1960s and 1970s with the exodus of production jobs in shoes, clothing, cheap electronics, and toys. After that, routine service work, like credit-card receipt processing, airline reservations...
Published on Nov 1, 2002in Marketing Science 2.49
Serdar Sayman6
Estimated H-index: 6
(Koç University),
Stephen J. Hoch31
Estimated H-index: 31
(UPenn: University of Pennsylvania),
Jagmohan S. Raju25
Estimated H-index: 25
(UPenn: University of Pennsylvania)
We examine the retailer's store brand positioning problem. Our game-theoretic model helps us identify a set of conditions under which the optimal strategy for the retailer is to position the store brand as close as possible to the stronger national brand. In three empirical studies, we examined whether market data are consistent with some of the implications of our model. In the first study, using observational data from two US supermarket chains, we found that store brands are more likely to ta...
Published on Oct 1, 2000in Journal of Marketing 7.82
Kenneth H. Wathne9
Estimated H-index: 9
(UW: University of Wisconsin-Madison),
Jan B. Heide27
Estimated H-index: 27
(UW: University of Wisconsin-Madison)
Abstract Much of the recent literature on interfirm relationships has focused on strategies for controlling opportunism. Somewhat surprisingly, little attention has been paid in this literature to the opportunism construct itself. Specifically, prior research has failed to recognize the different types of behavior that are hidden behind the general opportunism label. As a consequence, the knowledge of strategies for managing opportunism remains incomplete. The authors review the original and eme...
Published on Aug 1, 2000in Journal of Marketing Research 4.20
Marcel Corstjens12
Estimated H-index: 12
(Ad: INSEAD),
Rajiv Lal26
Estimated H-index: 26
(Harvard University)
Abstract In this article, the authors study the role of a store brand in building store loyalty through a game theoretic analysis. In a market in which a segment of consumers is sensitive to product quality and consumers’ brand choice in low-involvement packaged goods categories is characterized by inertia, the authors show that quality store brands can be an instrument for retailers to generate store differentiation, store loyalty, and store profitability, even when the store brand does not hav...
Published on May 1, 2000in German Economic Review 0.64
Dennis C. Mueller41
Estimated H-index: 41
(University of Vienna),
B. Burcin Yurtoglu24
Estimated H-index: 24
(University of Vienna)
In recent years considerable attention has been devoted to differences across countries in the institutional environments in which corporations operate, and the consequences of these institutional differences for corporate performance. In this paper we test for the presence of differences in corporate performance across 38 countries, and in particular whether these differences are related to the types of legal systems existing in each country. To measure corporate performance we estimate returns...
Published on Jan 1, 2000
Dow Jones Co1
Estimated H-index: 1
Published on Sep 1, 1999in Journal of International Business Studies 7.72
Bernard L. Simonin13
Estimated H-index: 13
(Tufts University)
The competitive nature of knowledge transfer and the process of organizational learning between partners constitute a fundamental challenge for both academics and practitioners alike. By focusing on one type of competency - marketing know-how - this research examines the role of knowledge ambiguity pertaining to the process of knowledge transfer in international strategic alliances. Based on a cross-sectional sample of 151 multinationals and a structural equation methodology, this study empirica...
Cited By24
Newest
Junpil Kim (POSTECH: Pohang University of Science and Technology), Hyunbo Cho21
Estimated H-index: 21
(POSTECH: Pohang University of Science and Technology)
A simulation model enables manufacturers to accurately evaluate the performance of their manufacturing systems. A vital input to build simulation models of manufacturing systems is the system behaviour, which is modelled based on extensive data on manufacturing systems and their elements. However, for outsourced manufacturing systems, data provided from external suppliers to manufacturers are generally limited and insufficient. Therefore, a solution is required to identify and secure system beha...
Published on Feb 12, 2018in Journal of Organizational Change Management 1.19
Deepa Mishra6
Estimated H-index: 6
(IITK: Indian Institute of Technology Kanpur),
Sameer Kumar33
Estimated H-index: 33
(University of St. Thomas (Minnesota))
+ 1 AuthorsRameshwar Dubey26
Estimated H-index: 26
Purpose Although there is a growing body of literature on human resource (HR) outsourcing, there are still unresolved issues regarding the level of outsourcing HR activities initiated in firms having different strategies and structures. This is relevant to examine because firms with different orientations (strategy and structure) cannot do HR outsourcing at the same level. The paper aims to discuss these issues. Design/methodology/approach A theoretical framework is developed and empirically val...
Published on Dec 1, 2016in Decision Sciences 1.96
Mashiho Mihalache2
Estimated H-index: 2
(NEOMA Business School),
Oli R. Mihalache6
Estimated H-index: 6
(WLU: Wilfrid Laurier University)
Mirroring the growing trend for firms to support their operations by locating activities abroad, research on the practice of offshoring has increased considerably in recent years. However, despite the mounting research, understanding of the key factors influencing decision-making for offshoring remains surprisingly limited due to fragmentation. In this study, we synthesize and integrate insights from different research domains in order to develop a comprehensive decisional framework for key offs...
Published on Dec 1, 2016in International Journal of Research in Marketing 3.32
MinChung Kim1
Estimated H-index: 1
(HKU: University of Hong Kong),
D. Eric Boyd8
Estimated H-index: 8
(JMU: James Madison University)
+ 1 AuthorsCheong H. Yi10
Estimated H-index: 10
(CityU: City University of Hong Kong)
Chief marketing officers (CMOs) are the marketing leaders in their respective firms and are responsible for creating shareholder value. To incentivize CMOs to focus on shareholders' interests, an increasing number of firms are compensating their CMOs with equity. This study examines the impact of CMO equity incentive on shareholder value and introduces three different forms of managerial discretion given to CMOs as contingencies determining when the impact of CMO equity incentive is more or less...
Published on May 16, 2016in Management Decision 1.96
Chen-Yu Lin1
Estimated H-index: 1
(FCU: Feng Chia University)
Purpose – The purpose of this paper is to examine the influence of consumers’ perceptions of convenience retailer innovativeness on their perceived value (PV) and store patronage intentions (PIs). Design/methodology/approach – A three-step PCRI-PV-PI model that integrates perceived convenience retailer innovativeness (PCRI), PV, and PIs is proposed. The moderating effect of consumer innovativeness on the relationship between PCRI and PIs is also examined. Findings – Modeling results confirm that...
Over the past decades, the retail industry has been continuingly prosperous through the constant booming of Chinese economy, a reality that retailers brand their store names or other private labels to products made by unaffiliated manufacturers. However, mass of data shows that retailers are reluctant to maximize their marketing efforts without private labels; from this perspective game theory was used to construct models for three modes, by which two distinguished circumstances depended on whet...
Published on Dec 1, 2015in Robotics and Computer-integrated Manufacturing 4.39
Sushma Kumari1
Estimated H-index: 1
(Aberystwyth University),
Akshit Singh7
Estimated H-index: 7
(Aberystwyth University)
+ 1 AuthorsJose Arturo Garza-Reyes17
Estimated H-index: 17
(University of Derby)
In the present, global and competitive market customer's demands are very volatile. It is very difficult for small and medium size enterprises (SMEs) to satisfy their customer with quality product in reasonable price. Large firms are spending huge amount of their budget in generating technology development. To cope with this competitive market, usually, SMEs concentrate on their core expertise and outsource some non-core items or activities. The outsourcing decision (when, what, whom) is very cr...
Published on Aug 1, 2015in Industrial Marketing Management 4.78
Daekwan Kim21
Estimated H-index: 21
(FSU: Florida State University),
Gang Ok Jung1
Estimated H-index: 1
(Hannam University),
Hyo Hyun Park2
Estimated H-index: 2
(Hannam University)
Abstract With the recent increase in the power of major retailers through consolidations, the world of brands has divided in two categories: national brands belonging to manufacturers and private brands belonging to retailers. While national brands are well studied in the literature, there is a dearth of studies on private brand phenomenon particularly from a manufacturer's point of view as opposed to that of retailers and consumers. To address this gap, we explore the antecedents and consequenc...
Chen-Yu Lin1
Estimated H-index: 1
(FCU: Feng Chia University)
This study aims to develop a reliable and valid measure of perceived retailer innovativeness (PRI) in Taiwan. Both qualitative and quantitative analyses were employed. A qualitative content analysis from six focus group interviews concludes a specific form of PRI. The quantitative study, which contains 486 7-Eleven and 489 Carrefour consumers, provides an exploratory and confirmatory factor analysis in examining the validity of PRI scale. Consumer perceptions of retailer innovativeness can be co...
Published on Jan 1, 2014
Luca Giustiniano9
Estimated H-index: 9
(Libera Università Internazionale degli Studi Sociali Guido Carli),
Lucia Marchegiani4
Estimated H-index: 4
+ 1 AuthorsLuca Pirolo7
Estimated H-index: 7
(Libera Università Internazionale degli Studi Sociali Guido Carli)