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Strategic Planning in Global Management (Multinational Strategies: Dealing…
Strategic Planning in Global Management
Multinational Strategies: Dealing With The Global-Local Dilemma
Local Responsiveness Solution
Respond to differences in the markets in all the countries in which the company operates in
Global Integration Solution
Conduct business similarly throughout the world
Locate company units wherever there is high quality and low cost
Global Local Dilemma
Choice between local-responsiveness and global approach to a multinational's strategies
Forms the basic strategic orientation of the company
Multinational Strategies
Multidomestic
Emphasizes local-responsiveness issues
Attract customers by selling products and services tailored to the needs of different countries
Usually costs more - Higher prices are then chargesd to recoup costs
Transnational
Seeks location advantages and economic efficiency through operating worldwide
Views any country as a global platform where it can perform any value-chain activity
International
Sell global products and use similar marketing techniques worldwide
Known as a "compromise approach"
Do not locate value-chain activities anywhere in the world
Hopes that the concentration of its R&D and manufacturing strengths at home brings greater economies of scale and quality than the dispersed activities of the transnational
Regional
Manages raw material sourcing, production, marketing and support activities within a particular region
Known as a "compromise strategy"
Attempts to gain some economic advantages similar to transnational and international stratgy
Attempts to gain some local-adaption advantages of the multifocal strategy
Resolving the Global-Local Dilemma: Formulating a Multinational Strategy
Strategy selection depends on the degree of globalization of the industry in which the company competes
Globalisation drivers - conditions in an industry that favour transnational or international strategies over multidomestic or regional strategies
Global Markets
Common Needs
Global Customers
Transfer Marketing
Costs
Are there global economies of scale?
Global sources of low-cost raw materials
cheaper sources of high skilled labour
Governments
favourable trade poilicies
regulations that restrict operations
Competition
volume of imports and exports in the industry
strategies of the competitors