In a global strategy, firms compete in all markets and offer homogeneos products

Question

In a global strategy, firms compete in all markets and offer homogeneos products. For a multi-domestic strategy, firms compete in each national/separable market independently of other markets. A global strategy can be defined as:

Companies such as GE, Apple, Sony and Gillette pursue a global strategy by competing in all markets, providing the same product for each market, strong centralised control, identifying customer needs and wants across international borders, and locating value adding activities where they can achieve the the lowest cost.

In a nutshell, a global strategy is effective when differences between customers in countries are small and competition is global.

A multi-domestic strategy involves producing products/services tailored to individual countries. Following this strategy innovation comes from local R&D; managers decentralise decision making; and encourage local sourcing. This strategy may result in higher production costs because of tailored products and duplication of effort across countries.

The industries that use Multidomestic strategy are - cutlery and hand tools, railroads, structural metal products, personal care, bedding and furniture. The products that are country specific come under multi-domestic strategy.

Traditional motives for the firms to expand internationally are :

Emerging motives for the firms that expand internationally are :

Explanation / Answer

An international strategy can take many forms. Explain what a global strategy is and how is it different from a multi-domestic strategy. What are the traditional and emerging reasons/motives that firms expand internationally?

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