Question

Identify and explain the four strategies that operations managers of international and multinational firms use to approach global opportunities. Please use example other than Amazon.

Answer 1

Every organization either it is an International or Multinational organization has its own organizational goal and a basic and the most important stepping stone in the path of achieving the same is to maximize its business environment and cover more and more region in the international market and to do that so the operation management of the firm has to make some strategies.

There are four strategies acquired by the Operational Managers to approach Global Opportunities in international market they are as follow:

1. International Strategy: It uses export and licensing to sell their products in foreign market. The local markets do not usually give response towards such products as they are selling the same product in every country. It is less cost beneficial as they are producing goods at one place and selling it in the new market at the same rate.In some areas international strategies proven to be beneficial as the risk falls on the licensee in case of license agreements and in case of exporting very less changes in operations have to be done. For Example: Lamborghini sells its product all over the world through exporting.

2. Multidomestic Strategy: In this strategy organizations change their product as the local requirements within each market, They emphasis on local responsiveness. They do not sell same product in every market which increases competitiveness in the local market. This strategy results in decentralization of the operations in each market. For Example: MTV Channel broadcasts shows of respective country which includes New Zealand, Pakistan, India and other countries.

3. Global Strategy: This strategy is entirely opposite of multidomestic strategy only minor or no modifications are done in the product or services. Its main focus is to gain economies of scale by providing same product in each market. Such organizations are usually controlled by a centralized operational hub to ensure standardization and controlled manufacturing. Their goal is usually to reduce the cost of the product and earn through economies of scale.For Example: Procter & Gamble (P&G), Consumer Good maker gain efficiency by producing global brands.

4. Transnational Strategy: This strategy lies somewhere between multidomestic and global strategy. They seek efficiency along with the need to adjust to local preference within various countries. Their nationality does not matters, Network is the one which are given more importance. Organizations following this strategy are neither centralized nor decentralized, Subsidiaries are given more freedom to perform their task on their own For Example: Major food chains such as Mcdonald`s and KFC sell same basic items around the world with few changes in their ingredients like beef is not consumed in Indian market resulting in menu excluding beef products and in France wine can be purchased from Mcdonald`s as it is a central item of their diet.