The Mechanism of Knowledge Transfer in Overseas Subsidiaries’ Business Alliances

The Case Study of FamilyMart in Taiwan and Shanghai

Abstract

This article examines a case study of strategic alliances in the convenience store industry to investigate the mechanism of knowledge transfer between overseas subsidiaries.

In 1988, FamilyMart formed a partnership with a local entity to establish Taiwan FamilyMart. The company achieved operational profitability in 1994 through knowledge transfer and adaptation. In 2004, FamilyMart expanded its convenience store operations to Shanghai, China. Leveraging the successful model of Taiwan FamilyMart, the company swiftly transitioned its management structure from company-operated stores to a franchising model.

This article explores the key factors that contributed to the successful growth of FamilyMart’s operations in Shanghai. It first analyzes the success of FamilyMart’s expansion in Taiwan, aiming to identify the strategies that facilitated its achievements in the Taiwanese market. Subsequently, a comprehensive analysis is conducted on the expansion of Japan FamilyMart’s convenience store operations in China during the 2000s, drawing insights from Taiwan FamilyMart’s business experience.

Based on the findings of this case study analysis, three critical success factors have been identified for optimizing knowledge transfer from Taiwan FamilyMart to Shanghai FamilyMart: organizational establishment, knowledge articulation, and an apprenticeship system.

This article further elucidates the mechanism of knowledge transfer between overseas subsidiaries and highlights the significance of management information, resource allocation, direct knowledge involvement, knowledge articulation, management beliefs and practices, and knowledge adaptation in in overseas subsidiaries’ business alliances.