Question

Identify and explain the four strategies that operations managers of international and multinational firms use to approach global opportunities.

Answer 1

The four strategies that operations managers of international and multinational firms use to approach global opportunities are based on the local responsiveness and cost reduction to offer the degree of differentiation and cost advantage, are such as –

• International strategy to sell the same product in each nation with very less cost advantage. It especially uses exports and licenses to capture the global market. It is one of the easy strategies with lower local responsiveness and cost reduction.
• Multi-domestic strategy is applied by having the joint ventures with considerable independence to maximize the competition in the local marketplace but with no cost advantage.
• Global strategy is applied with more centralized form and learning among business units to have economies of scale. It is good to use when focus is on cost reduction with higher local responsiveness. Generally used to produce hidden goods for customer.
• Transnational strategy is used to achieve economies of scale by reorganizing the core competence and the local pressure which does not exists in the home nation but somewhere else. It is applied in cross national limits to work as “world companies” where each subsidiary carries its own work in local ways.