Assume you are in charge of developing the strategy for an international company

Question

Assume you are in charge of developing the strategy for an international company selling products in some 50 different countries around the world. One of the issues you face is whether to employ a multi-domestic strategy, and global strategy, or a transnational strategy.

A. If your company's product is mobile phones, which of these strategies do you think would make better strategic sense to employ? Why?

B. If your company's product is dry soup mixes and canned soups, would a multi-domestic strategy seem to be more advisable than a global strategy or a transitional strategy? Why?

C. If your company's product is large home appliances such as washing machines, ranges, ovens, and refrigerators, would it seem to make more sense to pursue a multi-domestic strategy, a global strategy, or a transnational strategy? Why?

Explanation / Answer

Multidomestic strategy involves think local act local approach and is appropriate for companies that should change their product offerings and competitive strategies according to the different cultures, market conditions and buyer preference in the countries they do business. The global strategy is based on think global and act global approach and is suitable for companies that depend on the benefits from a standardized and globally integrated approach and does not depend on local responsiveness. Transnational strategy is based on think global act local approach and is used when there is importance for local responsiveness as well as taking benefit out of globally integrated approach.

A.If the company product is mobile phones global strategy would be better because the global strategy would help the mobile phone companies to make use of benefits from global integrated approach in all the 50 countries and the customers expect almost the same specifications and features in mobile phones irrespective of the markets. There is no importance for culture or habits while analyzing the buying behavior of mobile phone customers.

B. In the case of dry soup mixes and canned juices, the consumer interest would be different according to their culture and taste preferences. Some nations do not prefer much canned food and there can be difference in the type of ingredients in the soup mixes according to the consumer behavior and eating habits. Hence the strategy should focus on local responsiveness and hence a multi domestic strategy would be more advisable than a global strategy as global strategy uses same kind of product in all nations without considering local responsiveness.

C. A transnational strategy would be suitable for large home appliances companies. In the case of large appliances like washing machines and refrigerators, the companies need to focus on the benefit from global strategies as well as the local responsiveness. The climate, geography and people attitude towards the large appliances in the particular location largely affect the consumer buying behavior and the company needs to develop their strategies after analyzing the market conditions. The buying behavior can be influenced by adding features to the basic product that will help to match with the customer requirements in different countries. Hence a transnational strategy would help the companies in large appliance sector to make profit.

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