IDEAS home Printed from https://ideas.repec.org/a/eee/iburev/v17y2008i5p587-599.html
   My bibliography  Save this article

The influence of market and product knowledge resource embeddedness on the international mergers of advertising agencies: The case-study approach

Author

Listed:
  • Huang, Tai-Yuan
  • Hu, Jer-San
  • Chen, Kuo-Chia

Abstract

The acquisition of Taiwanese advertising companies by large multinational advertising syndicates stands out as unique compared to those in other industries. The strategic thinking involved in such acquisitions is worth a deep analysis. This study focuses on the merger of two Taiwanese and Japanese advertising agencies from the network embeddedness point of view. Using the case-study method, this paper probes into the motivations and strategy evolutions of the said mergers. The following findings were made: "product knowledge" and "market knowledge" are important resources on which advertisers and advertising agencies share mutual dependency in a given market. As products are marketed and experience growth, advertising agents and advertisers enter into a long-term cooperation relationship and resource embeddedness. When advertising agencies follow their advertisers into a foreign market, and thus also leading to bundled investments, the globalization strategies of the former become a consequence. Advertisers' need to understand the local competitive resources (i.e. market knowledge) leads to symmetrical resource complementarities with their advertising agencies in the multinational market. In the course of a merger dictated by common market knowledge needs, advertising agencies, enjoying an upper hand in resources, often have a greater dominance in the merger and acquisition process.

Suggested Citation

  • Huang, Tai-Yuan & Hu, Jer-San & Chen, Kuo-Chia, 2008. "The influence of market and product knowledge resource embeddedness on the international mergers of advertising agencies: The case-study approach," International Business Review, Elsevier, vol. 17(5), pages 587-599, October.
  • Handle: RePEc:eee:iburev:v:17:y:2008:i:5:p:587-599
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0969593108000875
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Charles Dhanaraj & Marjorie A Lyles & H Kevin Steensma & Laszlo Tihanyi, 2004. "Managing tacit and explicit knowledge transfer in IJVs: the role of relational embeddedness and the impact on performance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 35(5), pages 428-442, September.
    2. Yeniyurt, Sengun & Tamer Cavusgil, S. & Hult, G. Tomas M., 2005. "A global market advantage framework: the role of global market knowledge competencies," International Business Review, Elsevier, vol. 14(1), pages 1-19, February.
    3. Sharma, D. Deo & Blomstermo, Anders, 2003. "The internationalization process of Born Globals: a network view," International Business Review, Elsevier, vol. 12(6), pages 739-753, December.
    4. Nachum, L. & Rolle, J. D., 1999. "Home country and firm-specific ownership advantages: A study of US, UK and French advertising agencies," International Business Review, Elsevier, vol. 8(5-6), pages 633-660, October.
    5. Eriksson, Kent & Chetty, Sylvie, 2003. "The effect of experience and absorptive capacity on foreign market knowledge," International Business Review, Elsevier, vol. 12(6), pages 673-695, December.
    6. Arnold K Weinstein, 1977. "Foreign Investments by Service Firms: The Case of Multinational Advertising Agencies," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 8(1), pages 83-91, March.
    7. Nicolaj J. Foss & Volker Mahnke, 2003. "Knowledge Management What Can Organizational Economics Contribute?," DRUID Working Papers 03-02, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    8. Harris, Judy & Taylor, Kimberly A., 2003. "The Case for Greater Agency Involvement in Strategic Partnerships," Journal of Advertising Research, Cambridge University Press, vol. 43(04), pages 346-352, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hong, Jacky Fok Loi & Snell, Robin Stanley & Easterby-Smith, Mark, 2009. "Knowledge flow and boundary crossing at the periphery of a MNC," International Business Review, Elsevier, vol. 18(6), pages 539-554, December.
    2. Carrère, Céline & Fugazza, Marco & Olarreaga, Marcelo & Robert-Nicoud, Frédéric, 2016. "On the heterogeneous effect of trade on unemployment," CEPR Discussion Papers 11540, C.E.P.R. Discussion Papers.
    3. Reddy, Kotapati Srinivasa, 2015. "Extant Reviews on Entry-mode/Internationalization, Mergers & Acquisitions, and Diversification: Understanding Theories and Establishing Interdisciplinary Research," MPRA Paper 63744, University Library of Munich, Germany, revised 2015.
    4. Reddy, Kotapati Srinivasa, 2016. "Institutional Voids and Tax litigation in Emerging Economies: The verdict of Vodafone cross-border acquisition of Hutchison," MPRA Paper 74264, University Library of Munich, Germany, revised 2016.
    5. Ellis, Paul D., 2010. "International trade intermediaries and the transfer of marketing knowledge in transition economies," International Business Review, Elsevier, vol. 19(1), pages 16-33, February.
    6. Reddy, Kotapati Srinivasa, 2015. "Determinants of Cross-border Mergers and Acquisitions: A Comprehensive Review and Future Direction," MPRA Paper 63969, University Library of Munich, Germany, revised 2015.
    7. Reddy, Kotapati Srinivasa, 2015. "The State of Case Study Research in Mergers & Acquisitions: A Review of the Literature in Different Management Streams," MPRA Paper 63939, University Library of Munich, Germany, revised 2015.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:iburev:v:17:y:2008:i:5:p:587-599. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/133/description#description .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.