The Existance and Management of Local Assortment in Multinational Corporations - A case study at DeLaval
Abstract: Issue of study: In decentralised companies, products that are not in the central assortment, but still sold by the subsidiaries are known as local assortment. Understanding the reasons to why local assortment exists is important for the companies to ensure compliance. To have products that comply with laws and regulations are especially vital in the agricultural industry, due to its large personal risks for farmers. In order to create understanding for this, one must study reasons for why local assortment exists on the broadest level; both externally and internally. Few earlier studies have suggested approaches on how to manage them. Through studying a wide range of management tools in order to find the most suitable ones for local assortment, this gap will be filled by this study. Purpose: The purpose of this study is to provide an understanding to why local assortment exists in multinational corporations and develop a framework consisting of key variables in managing such products. Methodology: A case study has been conducted at DeLaval. The case consists of four sub-cases where information regarding local products was collected through semi-structured interviews with DeLaval´s subsidiaries. The study has used a cross-sectional research design with identical qualitative data collection in each case. This allows for a cross sub-case analysis in order to find general patterns. The deductive research approach was applied throughout the study, which allowed for the usage of a theoretical framework when approaching the empirical study. In order to have an unbiased literature review and find the most important sources, a systematic review was used. Conclusion: The conclusion is divided into two major parts; an academic contribution and a case specific conclusion. The academic contribution consists of a framework which explains the five most important reasons to why local products exist. The most important reason is system sell, which indicates that local products are used to support sales of the central assortment. The framework also presents key variables for successfully managing local products, where different types of communication as well as a structured and simple process are extra important. The case specific conclusion points out the need of local products for the case company. Currently, there are tensions and ambiguities regarding if local product are acceptable or not. Hence, the case company should clarify, within the whole organisation, on what grounds local products are acceptable. This study suggests a global process for local product development as one of those grounds.
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