Question

JJ Services (JJS) is a multinational company with sub-units in 18 different countries. The founder of the company has always followed the strategy that allows JJS to create independent operating units in each country into which it expands. JJS is following what type of strategy?

A. Transnational strategy

B. Licensing strategy

C. Multidomestic strategy

D. Global strategy

E. Franchising strategy

Answer 1

C. Multi-domestic strategy

Option C is correct because under Multi-domestic strategy, the parent company can choose to focus upon the operations of its sub-units in each country as per the local market needs and hence it may not be a uniform strategy globally. It shall be customized to the local markets.

Option A is incorrect because in Transnational strategy, the company has to promote the same kind of approach across all its sub-units globally. In Licensing strategy, one company in the home country grants permission to some other company in the host country to undertake the operations of the former company in a prescribe way, which is not the case in the above question. Hence option B is excluded as well. Option D is rather more general concept wherein the Parent company decides to expand in the global space. Therefore, it is incorrect. Option E is also wrong because Foreign Franchising is a specialized type of licensing in which a firm can get an opportunity to venture into the global markets by obtaining the license to manufacture and market its products in the host country with certain operating regulations in place. However, the operations shall remain very similar to that of the Parent company.