Question

Explain the differences between international, global, transnational, and

multidomestic strategies . What roles do industry and firm

characteristics play in the choice of strategy ? Justify your answer

and use examples where appropriate.

Answer 1

The difference between the four strategies are as below:

1. Global Strategy: In this strategy, the company views the world as one only which means it treats the world as a single market. The controls and operations are handled by effective authority from the headquarters and more focus is given for the standardisation of the product at the global level. The main characteristics for this strategy is that the pressure of global integration is very high as compared to national responsiveness which is low. Example: Coca Cola as the product they sell are standarised for all the customers around the world.

2. International Strategy: In this strategy, the company uses existing core competencies to exploit and use the opportunities for the foreign markets around the market. The level of global integration is low as well as the level of local responsiveness for various countries. For example, Airbnb as it is still not open and active in many countries and but only a few and is working well in it.

3. Transnational Strategy: It is the strategy where the company is highly flexible to facilitate the local response and adjust for the global needs. Complex Coordination mechanism is adopted which helps the compang to highly integrate at the global levels and also adapt for the local responsiveness. For example, Amazon as different people having different needs and this company serve them accordingly in various countries.

4. Multidomestic Strategy: At last, multidomestic strategy is the one where the company essentially rely on the foreign subsidaries which operate as the autonomous units to provide and localise as per the needs and wants of the people. Thus, the global integration is lesser than that of the local responsiveness of the company. For example Nestlé uses a unique marketing and sales approach for each of the markets in which it operates.