Study break time:
Bonus points if you can tell me what the differences are between the following:
- International Business Strategy
- Multidomestic Business Strategy
- Global Business Strategy
- Transnational Business Strategy
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2 comments:
Ok, so this is how it was explained to me:
International: You have your home location/country, but you also have locations in other countries. Your home country is sort of the brain, but your other locations are the arms.
Multidomestic: You have locations in different countries, but they are somewhat independent of each other. The point of the multidomestics are to use the local knowledge and whatnot.
Global: I'm not sure about this one... I would guess that global is sort of a mix between the two. You have your locations all over, but they kind of share information and responsibility.
Transnational: Beats the heck out of me... we only covered the first two.
You're on the right track...but it's more a function of how a company deals with international pressures on costs and local responsiveness. (at least according to my professor)
An international strategy is when a company has very little pressure for cost reduction and little pressure for local responsiveness (customization). The company basically can start selling its goods in other countries with just minor customization, and at current pricing levels.
The Global strategy is entering a market where there are high cost reduction pressures and little need for customization. This is used when a standardized product can be sold in various nations and achieving economies of scale.
The Multidomestic strategy is when the company faces high pressure for local customization and little cost pressure. These companies perform all product design and manufacturing in the local country and produce a product for that specific region.
The transnational strategy is a combination of global and multidomestic. It is when a company faces pressures to lower cost by creating a standardized product, but also faces pressures to be locally responsive. This one can be tricky...but it's the one that makes the most sense given the current world market.
Got all that? ;-)
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