Global strategies have many issues to be concerned with such as economic, cultur

Question

Global strategies have many issues to be concerned with such as economic, cultural, and legal & political issues. Legal and political issues vary per country. Economic factors involve currency exchange rate, inflation, and the diverse tax policies. What are some of the global strategies that companies in the United States have implemented to offset many of the economic issues; such as the rise in gas prices and the property market decline? Also, come up with a global strategy plan to address and improve the issues you just conveyed.

Explanation / Answer

One of the most popular global strategy adopted by MNCs is multi domestic or localization strategy. It not only helps to suit the local taste and preference but also, it suits to the economic status of people of that country. Offering products in small packages, use of low cost materials in products manufacturing is the part of a global strategy.
Second global strategy is cost leadership strategy that focuses on economies of scale and low cost. It also helps in market penetration. Thus, product price is according to the purchasing power of individuals of the country.
Third global strategy is international strategy that sells the same product across the globe. It also matches pricing that is most suitable as per the per capita income or purchasing power of individuals. Due to the standardization of the product, its superior efficiency in production and global appeal make it successful.

A global strategic plan should be localized in nature with different product pricing strategy suitable for each country. MNCs should go into a joint venture with any local major player. It will help to get the understanding of the local market and competition. As an alternative approach, MNC can set up wholly owned subsidiary. In the beginning, MNC should follow penetrative pricing to enter into a new market. It can help the company to capture market share. Later on, product at the higher end of the value chain can be offered with premium pricing. Here, MNC can earn profit. But, before doing all these initiatives, MNC must analyze PEST and porter 5 force analysis while planning for entry into the market.

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