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Strategic Divisionalization, Product Differentiation and International Competition

Iwasa, Kazumichi and Kikuchi, Toru (2007): Strategic Divisionalization, Product Differentiation and International Competition.

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Abstract

In this note we construct a simple international differentiated duopoly model that involves a divisionalization decision. It will be shown that the number of third market divisions of a parent firm with a cost advantage is relatively large. The results imply that the cost competitiveness of one country’s firm will be magnified through divisionalization decisions.

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