روش تولید بهینه برای نفوذ به بازارهای خارجی: استاندارد، بومی سازی و فن آوری های انعطاف پذیر

This paper examines firms' production strategies for supplying products tailored to the target country's local taste: developing a new localized variety and modifying an existing variety to fit the local taste. Adopting the concept of the flexible technology in industrial organization theory, the paper develops a simple theoretical model to examine when and why exporters or multinationals adopt flexible technologies to serve multiple markets. The results suggest that firms with basic varieties that are considerably different from the variety demanded by the local country are likely to develop localized varieties to serve the country, whereas those with basic varieties that are considerably similar to the demanded variety are likely to modify their existing varieties. In some circumstances, even when foreign production has an intrinsic cost advantage over exporting before the application of a flexible technology, firms may choose to be exporters by adopting the technology. In addition, the results indicate a possible industry equilibrium: Firms with basic varieties that are considerably similar to the variety demanded by the local country are likely to modify them and become multinationals, whereas those with basic varieties that are considerably different from the demanded variety are likely to develop new localized products and become multinationals. Otherwise, firms are likely to modify their existing platforms and become exporters.

Since the seminal work of Krugman (1980), theoretical progress in international trade has relied mainly on product differentiation and the taste of variety. Existing trade theories incorporate differentiated products into monopolistic competition and successfully explain intra-industry trade. However, noteworthy is that, despite the general use of product differentiation and product varieties, no study has provided a systemic analysis of technologies for developing and producing differentiated varieties in international trade. In addition, although a country's demand for product varieties is driven by local consumers' specific taste as well as their preference for the love of variety,1 most trade theories based on product differentiation ignore the difference in the taste between countries. Because consumers' tastes vary across countries, many multinationals and exporters supply differentiated products that are tailored to local tastes. For examples, Microsoft offers its software products in various languages, and Samsung's mobile phones have different specifications and functions across countries. Many multinationals in China add Chinese herbs to their products to fit local taste in China.2 In addition, there are two major strategies for producing products that satisfy the local taste: producing newly developed localized products and producing a variant of existing products that is modified to fit the local taste. Honda, a Japanese automaker, sells different versions of Accord in North America and Japan. The two versions are basically the same, but their shapes and specifications are slightly different. However, Nissan's Altima, one of the best-selling cars in North America, is unique to that market. That is, no equivalent model is sold in Japan. For another example, McDonald's makes several variants of Big Mac or country-specific menu to fit country-specific tastes.3 According to a survey of foreign affiliates in the manufacturing sector in Korea conducted by the Korea Institute for Industrial Economics and Trade (KIET), 63.3% of the foreign affiliates produced standardized but locally modifiable products; 22.8% produced fully localized products tailed to the Korean market; and 8% produced standardized products (Kang et al., 2004, Table 1). These results are consistent with those of KIET's (2008) survey of Korean multinationals in the manufacturing sector: 54.9% of Korean multinationals produced standardized but locally modifiable products; 25.4% produced fully localized products; and 19.7% produced standardized products. Therefore, modifiable products and related technologies are widely observed in the real economy, but they have received little attention from international economists. However, they have received some attention from industrial organization economists and are known as the flexible technology ( Boyer and Moreaux, 1997, Chang, 1993, Chang, 1998, Eaton and Schmitt, 1994, Norman, 2002 and Norman and Thisse, 1999). Although there is no widely accepted definition of the flexible technology, it generally refers to the technology used for producing multiple variants of products by modifying basic ones (in this paper, “platforms”). By adopting the flexible technology, firms with multiple products can reduce the cost of developing new ones and thus enjoy the benefit of economies of scope. 4 Because multinationals and exporters that supply products tailored to local tastes are essentially multi-product firms, they are motivated to adopt flexible technologies to pursue this benefit. In this regard, the present paper develops a simple theoretical model to examine when and why exporters or multinationals adopt flexible technologies to serve multiple markets. In addition, the study employs the developed model to examine firms' choice between exporting and foreign production. The results suggest that firms may choose to be exporters by adopting a flexible technology even when foreign production has an intrinsic cost advantage over exporting before the application of the technology. In addition, the results indicate a possible industry equilibrium: Firms with platforms that are considerably similar to the variety demanded by the local country are likely to modify them and become multinationals, whereas those with platforms that are considerably different from the demanded variety are likely to develop new localized products and become multinationals. Otherwise, firms are likely to modify their existing platforms and become exporters. The rest of this paper is organized as follows: Section 2 defines the flexible technology and develops a theoretical model for analyzing firms' choice of production strategies. Section 3 discusses an optimal production method for firms and the possible industry equilibrium in a monopolistically competitive industry, and Section 4 concludes with a summary of results.

Since the seminal work of Krugman (1980), theoretical progress in international trade has relied mainly on product differentiation and the taste on variety. However, no study has provided a systemic analysis of technologies for developing and producing differentiated varieties in international trade. In this regard, this paper examines the following production strategies for supplying products tailored to a given country's local taste: developing a new localized variety and modifying an existing platform to fit the local taste. The latter strategy is known as a flexible technology in industrial organization theory and is widely observed in the real economy. Adopting the flexible technology in industrial organization theory, this study develops a simple theoretical model for determining when and why exporters or multinationals adopt flexible technologies to serve multiple markets. The results suggest that firms with platforms that are considerably different from the variety demanded by a local country are likely to develop localized varieties to serve that country, whereas those with platforms that are considerably similar to the demanded variety are likely to modify their existing varieties. In some circumstances, even when foreign production has an intrinsic cost advantage over exporting before the application of a flexible technology, firms may choose to be exporters by adopting the technology. In addition, the results imply a possible industry equilibrium: Firms with platforms that are considerably similar to the variety demanded by a local country are likely to modify them and become multinationals, whereas those with platforms that are considerably different from the demanded variety are likely to develop new localized products and become multinationals. Otherwise, firms are likely to modify their existing platforms and become exporters.