Please do not give solution in image format thanku Assume you are in charge of developing the strategy for a multinational company selling products in some 50 countries around the world. One issue you face is whether to employ a multidomestic strategy, a transnational, or a global strategy.     Read the overview below and answer the questions that follow.   When competing internationally, strategy making is more complex for five reasons: (1) different countries have home-country advantages in different industries; (2) there exist location-based advantages to performing different value chain activities in different parts of the world; (3) varying political and economic risks make the business climate of some countries more favorable than others; (4) companies face the risk of adverse shifts in exchange rates when operating in foreign countries; and (5) differences in buyer tastes and preferences present a conundrum concerning the trade-off between customizing and standardizing products and services.   A company must choose among three alternative approaches for competing internationally: (1) a multidomestic strategy or think local, act local approach to crafting international strategy; (2) a global strategy—a think-global, act-global approach; and (3) a combination of think-global, act-local approach, known as a transnational strategy. A "think-local, act-local" or multidomestic strategy is appropriate for industries or companies that must vary their product offerings and competitive approaches from country to country in order to accommodate different buyer preferences and market conditions. The "think-global, act-global" approach (or global strategy) works best when there are substantial cost benefits to be gained from taking a standardized and globally integrated approach and little need for local responsiveness. A transnational approach (think global, act local) is called for when there is a high need for local responsiveness as well as substantial benefits from taking a globally integrated approach. In this approach, a company strives to employ the same basic competitive strategy in all markets but still customize its product offering and some aspect of its operations to fit local market circumstances.     1.  If your company produces a basic mobile phone with limited features and wants to compete internationally, which strategy would the company most likely employ—a multidomestic strategy, a transnational strategy, or a global strategy? A multidomestic strategy would make the most sense since the mobile phone's features must be tailored to the specific market conditions and buyer preferences in each country market. A transnational strategy would be appropriate since the same strategic theme could be employed, but country-to-country customization is necessary to accommodate consumer preferences in mobile phone features. A global strategy would work best as it allows the company to use a different competitive approach in each country. A global strategy would work best since the same phone will be offered and most likely will require only very minor deviations from one country to another. A transnational strategy would make better strategic sense since it provides for tailoring the competitive strategy for each country's market.

Understanding Business
12th Edition
ISBN:9781259929434
Author:William Nickels
Publisher:William Nickels
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
icon
Related questions
Question

Please do not give solution in image format thanku

Assume you are in charge of developing the strategy for a multinational company selling products in some 50 countries around the world. One issue you face is whether to employ a multidomestic strategy, a transnational, or a global strategy.

 

 

Read the overview below and answer the questions that follow.

 

When competing internationally, strategy making is more complex for five reasons: (1) different countries have home-country advantages in different industries; (2) there exist location-based advantages to performing different value chain activities in different parts of the world; (3) varying political and economic risks make the business climate of some countries more favorable than others; (4) companies face the risk of adverse shifts in exchange rates when operating in foreign countries; and (5) differences in buyer tastes and preferences present a conundrum concerning the trade-off between customizing and standardizing products and services.

 

A company must choose among three alternative approaches for competing internationally: (1) a multidomestic strategy or think local, act local approach to crafting international strategy; (2) a global strategy—a think-global, act-global approach; and (3) a combination of think-global, act-local approach, known as a transnational strategy. A "think-local, act-local" or multidomestic strategy is appropriate for industries or companies that must vary their product offerings and competitive approaches from country to country in order to accommodate different buyer preferences and market conditions. The "think-global, act-global" approach (or global strategy) works best when there are substantial cost benefits to be gained from taking a standardized and globally integrated approach and little need for local responsiveness. A transnational approach (think global, act local) is called for when there is a high need for local responsiveness as well as substantial benefits from taking a globally integrated approach. In this approach, a company strives to employ the same basic competitive strategy in all markets but still customize its product offering and some aspect of its operations to fit local market circumstances.

 

 

1. 

If your company produces a basic mobile phone with limited features and wants to compete internationally, which strategy would the company most likely employ—a multidomestic strategy, a transnational strategy, or a global strategy?

A multidomestic strategy would make the most sense since the mobile phone's features must be tailored to the specific market conditions and buyer preferences in each country market.

A transnational strategy would be appropriate since the same strategic theme could be employed, but country-to-country customization is necessary to accommodate consumer preferences in mobile phone features.

A global strategy would work best as it allows the company to use a different competitive approach in each country.

A global strategy would work best since the same phone will be offered and most likely will require only very minor deviations from one country to another.

A transnational strategy would make better strategic sense since it provides for tailoring the competitive strategy for each country's market.

Expert Solution
steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Globalization
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, management and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
Understanding Business
Understanding Business
Management
ISBN:
9781259929434
Author:
William Nickels
Publisher:
McGraw-Hill Education
Management (14th Edition)
Management (14th Edition)
Management
ISBN:
9780134527604
Author:
Stephen P. Robbins, Mary A. Coulter
Publisher:
PEARSON
Spreadsheet Modeling & Decision Analysis: A Pract…
Spreadsheet Modeling & Decision Analysis: A Pract…
Management
ISBN:
9781305947412
Author:
Cliff Ragsdale
Publisher:
Cengage Learning
Management Information Systems: Managing The Digi…
Management Information Systems: Managing The Digi…
Management
ISBN:
9780135191798
Author:
Kenneth C. Laudon, Jane P. Laudon
Publisher:
PEARSON
Business Essentials (12th Edition) (What's New in…
Business Essentials (12th Edition) (What's New in…
Management
ISBN:
9780134728391
Author:
Ronald J. Ebert, Ricky W. Griffin
Publisher:
PEARSON
Fundamentals of Management (10th Edition)
Fundamentals of Management (10th Edition)
Management
ISBN:
9780134237473
Author:
Stephen P. Robbins, Mary A. Coulter, David A. De Cenzo
Publisher:
PEARSON