World product mandates of subsidiaries in lead markets

3 World product mandates of subsidiaries in lead markets 

Porter (1990) emphasis the home base of a firm as a determinant of the competitiveness of firms Firms are conq)etitive because the country of the home -base has competitive advantages. Porter defines the home base of a firm not as the country where the firm was founded but where strategy is set, core product and process development takes place, and the essential and proprietary skills reside (Porter 1990, p. 69). Consequently, Porter argues that companies can move their home -base abroad If the circumstances in the home nation do not support the innovation required for competitive advantage and cannot be inq roved a firm must shift its home base to a nation that better catalyzes and provides the needed tools for international success (Porter 1990, p. 614). Porter (1990) includes other functions than R D as well to be shifted and emphasis that a firm can have different home bases for each distinct businesses. This is the ultimate act of global strategy (Porter 1990, p. 615). 

When assigning a world product mandate to the subsidiary in the lead mark Jt, responsiveness and integration match in the lead market. The lead market subsidiary has a clear world market task while concentrating all functions on the feedback from the local market. The disadvantage of a world product mandate of the subsidiary in the lead market is the risk that the lead market was erroneously selected. If the host country turns out to be an idiosyncratic market rather than a lead 

As a result of this variety of motivations to assign product mandates, multinational firms often have an incoherent strategy of mandate assignment based on host country environment. 

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