An External Subsidiary is a separate entity established by a corporation and has separate resources allocated to it. These resources are dedicated to the exploration, prototyping and development of innovative technologies.
The corporate identifies unique business ideas and opportunities that are ahead of the existing market technology. The external subsidiary then identifies possible avenues and methods of innovating those unique business ideas by leveraging existing technologies as well as creating new systems. This rapid prototyping at the hands of the subsidiary enables the corporate to devise business plans that have a strong go-to-market strategy.
In the post-digital era, digital marketing activities and effective utilisation of digital marketing channels is going to be not just essential but crucial when determining the outcome of success of any new and innovative start-up.
The biggest benefit of having an external subsidiary with a strong focus on technology consulting and software development is that the subsidiary can create and innovate technologies and systems without any restrictions or constraints. Hence, a minimum viable product or prototype (MVP) can be created in a short span of time.
This external subsidiary can be thought of as an external start-up or technology services provider that leverages its industry knowledge base and the expertise of its specialists to innovate and create novel business ideas.