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What is International Subcontracting

Chapter 2
Origin and Branding in International Market Entry Processes
It is also known as outsourcing or contract manufacturing. Domestic subcontracting has flourished in a number of highly industrialised countries, particularly the United States and Japan. International subcontracting is a logical continuation of domestic subcontracting. The main cause of the large manufacturing companies’ reliance on small-scale businesses for the supply of the parts and components for their assembly is that the pay rate in the unorganised sector is significantly lower than the rate that prevails in the organised sector. It differs significantly from contracting as the manufacturer does not grant the subcontractors the right to build the entire product on behalf of the manufacturer, and the company essentially retains control over the product's final assembly.
Published in Chapter:
Market Entry Strategies
Oindrila Chakraborty (J.D. Birla Institute, India)
Copyright: © 2023 |Pages: 40
DOI: 10.4018/978-1-6684-6613-1.ch002
Abstract
The chapter aims to explore different modes of market entry strategies in international markets for market expansion against the relevant competition, and also to investigate different entry strategy-based examples to discover the corporate uniqueness which could build up a specialised distribution and supply chain management for their competitive advantage. At times it may help to nurture product or the corporate image. This study will explore different components of market entry strategies like exporting, franchising, contracting, joint venture, licensing, technology transfer, international subcontracting, turnkey, mergers and acquisition, and foreign direct investment.
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