reply to 3 students using 90 words or more towards each student and ADD a direct question to each reply. Ensure each name is with its corresponding reply.
1st Student Jamie BakerFlores
The article from Lumen presents the four global business strategies as Export, Standardization, Multidomestic, and Transnational. During my reading I found them referred to as International, Global, Multidomestic, and Transnational (Smartling, n.d.).
Each strategy has its benefits and drawbacks, so adopting the one that makes the most sense depends on the company’s global vision and goals.
Export/International is arguably the simplest and most efficient strategy. Companies utilizing this strategy prefer to have domestic operations in their home market with little to no foreign operational investment. They prefer to export their product to other foreign markets. This streamlines their processes and keeps operating costs lower. The downside is increased complexity in supply chain management and increased import taxes/tariffs. The Export/International strategy has the lowest global integration and the lowest local responsiveness–as such these companies have minimal interest in adapting to foreign cultures. Examples are Ferrari and Lamborghini–both are built and shipped exclusively from their home factories in Maranello and Sant’Agata Bolognese (respectively).
Standardization/Global enjoys a high degree of global integration but a lower local responsiveness. This is because while the brand and product/service may be manufactured in locally in foreign locations–which may be staffed with locals–the end result is still at the discretion of the home office and the product/service to the consumer remains the same. This provides operational efficiency and economies of scale because manufacturing is streamlined and standardized. Minor adjustments may be made for localized reasons–such as language–but overall culture has very little influence on the product or design. A trade-off is that companies that employ this strategy are betting that their product/service maintains its global appeal and that local competition doesn’t displace its market share. Amazon is an example of a company using the Standardization/Global strategy. Amazon has country-specific sites around the world (I use Amazon.co.uk frequently) but the business model is the same everywhere–one-stop shopping and fast delivery.
A Multidomestic strategy entails having a centralized parent company or corporate HQ but employing subsidiaries or separate companies in different markets to meet specific, localized consumer demands. This is similar to the divisional organizational structure–each company is a separate and specialized entity that works independently to accomplish its specific goal. The benefit for this particular strategy is it has the highest degree of local responsiveness; it is very concerned with localized needs and wants of customers and ensuring they are able to meet those challenges rapidly. This strategy allows companies to become ingrained in the local culture; in fact the strategy hinges on their ability to do so. Multidomestic-minded corporations typically delegate regional operations and decision-making to the subsidiaries because they are in the best position to respond to local market forces. The downside is they have lower global integration since each subsidiary is a niche organization servicing the needs of a distinct market. Nestle is an example of a successful multidomestic corporation–they have over 2000 companies in 186 countries.
While multidomestic corporations have multiple subsidiaries, transnational companies have multiple operations, products/services, and assets abroad but all fall under the same brand identity or parent company. Instead of having separate, independently run divisions, transnationals have centralized management that coordinates major decisions. This strategy enjoys a high degree of global integration and local responsiveness. The brand remains the same everywhere, but the product/service can be tailored to local requirements as needed. This means they can have efficient processes and centralized upper management while still enjoying the benefit of being customer-focused and making decisions based on local conditions. Often this company employs local managers, adapts product packaging, marketing, and sales to be culturally conscious. McDonald’s is a prime example of a transnational company–McDonald’s is globally recognized but their product lines differ based on local tastes and cultural influences. McDonald’s replaces hamburger with chicken in India because cows are considered sacred an din Canada you can get poutine at a McDonald’s.
Deciding which strategy to adopt really depends on what a company is trying to achieve in respect to its global footprint. Each strategy demands a different level of cultural awareness and synergy to accomplish those goals.
Information pulled from LumenLearning and Smartling:
2nd Student Peter Lanphear
The four different types of strategies discusses in the reading this week were: export, standardization, multidomestic, and transnational strategies. The first strategy to be discussed is the most basic out of the four strategies, this allows the businesses to take advantage of an international opportunity if one arises, but the overall focus will be on the domestic sales. In terms of international culture, this strategy does not require too much thought, since most of the focus is domestic. “It does not attempt to customize its products for international markets. It is not interested in either responding to unique conditions in other countries or in creating an integrated global strategy.” (Lumen, n.d.)
The second strategy to be discussed will be standardization. This strategy allows a business to keep the same strategy it has for domestic sales, and replicate this overseas into new markets. This goes up the chain in terms of international culture, since the focus will be on expansion in new countries, but they do not have to put much focus on the culture itself. “A standardization strategy produces efficiencies by centralizing many common activities, such as product design, gaining scale economies in manufacturing, simplifying the supply chain, and reducing marketing costs.” (Lumen, n.d.) A good example of a standardization strategy would be like Domino’s pizza since the methodology does not need to be changed at all in order to expand into new markets.
The third strategy explained will be multidomestic, this strategy relies heavily on international cultural awareness in order for the product to be successful. Multidomestic puts a large emphasis on finding out how each new market or culture runs in order for the business to be successful, a lot of time and energy are required in order to make this work. “In a company with a multidomestic strategy, overall management is centralized in the home country but country managers are given latitude to make adaptations. Companies sacrifice scale efficiencies for responsiveness to local conditions.” (Lumen, n.d.) In order to be successful, the home base needs to work with the country managers and allow the needed changes to go through for the product or service to be successful. A good example of this would be JP Morgan Chase, instead of requiring their home office to do all of the work, they rely on their country managers to be subject matter experts, and implement changes as needed. This has the highest level of international culture in its model so far, since it relies so much on the home country to continually work with the overseas managers.
The final strategy to be discussed is the most difficult to maintain, transnational. “It is used when a company faces significant cost pressure from international competitors but must also offer products that meet local customer needs.” (Lumen, n.d.) The reason it is so difficult to maintain is because it needs to maintain standardization and multidomestic strategies at the same time. This strategy has the highest levels of international culture since it has to continue expanding into different markets, while continually adapting the strategy for it to be successful in those markets. This takes a lot of time, research, and financing to achieve. Tesla is a good example of this strategy, it will be trying to catch an emerging electric car market in China, this will be easy on one end since their parts are the same. The hard part will be the regulations that they need to make sure they are abiding by, and continually keeping their practices and procedures legal.
In my eyes, I feel like a standardization strategy would be the easiest if you want to expand into other countries to grow revenue, if you already have standard practices established and know you have a target market to reach out to, this would be an effective way to grow. The other strategies that rely on multidomestic seem like they could be very draining financially since there is so much more to be aware of constantly.
Lumen. (n.d.). Global Business Strategies for Responding to Cultural Differences. Retrieved February 25, 2022, from https://courses.lumenlearning.com/wm-principlesofmanagement/chapter/responding-to-cultural-differences/
3rd Student Rachel Willson
In the article we read this week about Global Business Strategies for Responding to Cultural Differences, the four global business strategies discussed include the standardization strategy, the transnational strategy, the export strategy, and the multidomestic strategy (Lumen, n.d.).
-International culture does not play a huge part in the export strategy because this strategy focuses on domestic operations with occasional exporting of products internationally (Lumen, n.d.). For those products exported internationally, the company would have had to do research about the country and culture they are sending it to, to ensure the product will be successful.
-International culture does not play a huge part in the standardization strategy because this strategy focuses on creating one product that will be successful all over the globe (Lumen, n.d). For example, companies such as Apple, Domino’s, and Hewlett Packard have the same products that are being sold internationally. Researching the specific cultures either was not necessary or was done such that the products would be successful in that country.
-International culture plays a part in the multidomestic strategy because this strategy, “customizes products or processes to the specific conditions in each country” (Lumen, n.d.). For example, McDonald’s sells the same sandwiches in each country it has a franchise location, however, in Thailand they expand their menu to include products the locals like such as the Samurai Pork Burger, pineapple pie, and traditional Thai rice pudding (Kaur, 2018). McDonald’s would have had success in each country, but since they tailored their menu for each culture, they are unquestionably profiting more than they would have been.
-International culture plays a part in the transnational strategy because this strategy combines the standardization and multidomestic strategies by creating one product that is customizable for each country (Lumen, n.d.). For example, Samsung personalized their electronics in South Korea to include a kimchi refrigerator (What, 2018). Transnational companies have one product that they found success in then change some aspects of it to fit the countries desires.
Kaur, H. (2018, February 3). What McDonald’s is Like Around the World. Retrieved
Lumen. (n.d.). Global Business Strategies for Responding to Cultural Differences. Retrieved
What is a Transnational Strategy? (2018). Retrieved from https://www.smartling.com/resources/
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