Counterfeiting Risk Management for SMEs and Industrial Subcontracting Activities: A Literature Review

Abstract

Companies re-organize their production on a global basis by taking advantage of more competitive differences between countries, particularly in terms of costs. Counterfeiting is one of the reasons for the relocation of an economic activity abroad. This chapter analyses hedging strategies against counterfeiting risks put in place by outsourcers when subcontracting their economic activity abroad. It explores the counterfeiting risk factors associated with industrial subcontracting projects. For legal experts, subcontracting is divided into two sub-concepts, namely industrial subcontracting and contract subcontracting. The chapter presents a differentiation of endogenous and exogenous risk factors. It proposes a “decision tree” that enables us to identify the various options presented to small and medium-sized enterprises (SMEs) faced with counterfeiting risk during their international subcontracting transactions and summarizes some proposals. Subsequently, this tree could be used within the context of empirical studies in order to verify the discussed proposals.