Unraveling the Relationships Between Internationalization and Product Diversification Among the World's Largest Food and Beverage Enterprises

Abstract

This chapter examines the interrelationships between internationalization and product diversification among the world's l35 largest food and beverage enterprises. Based on the argument that food and beverage enterprises enjoy economies of scope when moderately diversifying into new countries and product areas, but encounter resource constraints when extremely diversified and internationalized, we expect to find an inverted U-shaped relationship between the two strategies. Nevertheless, we find that the relationships between the two strategies show both an inverted U-shaped (when geographic diversification is the dependent variable and product diversification the independent one) and a U-shaped pattern (when product diversification is the dependent variable and geographic diversification the independent one). These results imply that the relationships between internationalization and product diversification among food and beverage enterprises are more complex than currently conceived.

Citation

Hashai, N., Almor, T., Papanastassiou, M., Filippaios, F. and Rama, R. (2011), "Unraveling the Relationships Between Internationalization and Product Diversification Among the World's Largest Food and Beverage Enterprises", Ramamurti, R. and Hashai, N. (Ed.) The Future of Foreign Direct Investment and the Multinational Enterprise (Research in Global Strategic Management, Vol. 15), Emerald Group Publishing Limited, Leeds, pp. 271-299. https://doi.org/10.1108/S1064-4857(2011)0000015016