three types of global competitive strategy
- There are three types of global competitive strategy: Global, Multi-domestic, and Transnational approaches. Discuss the advantages and disadvantages associated with the multi-domestic strategy. Provide your suggestions on the managerial considerations (e.g., organizational structure, control systems, coordinating mechanisms, etc.) for the successful implementation of the multi-domestic strategy.
Concerning a multi-domestic strategy, an organization becomes receptive to the concerns of its customers in a more profound manner in an international marketplace where it does business. The benefit associated with this strategy is the fact that it makes business companies’ offers receptive to the concerns presented by customers and assists in the strong establishment of companies into the international marketplaces. A strategy is an important tool used by business entities to create a better connection with customers all over the world. The decision on what strategy to use depends on the nature of the organization’s products as well as the overall strategy adopted by the organization. The strategy is appropriate in a situation where business organizations try to gain economies of scale and efficiency. Also, it is worth noting that a multi-domestic strategy is considered appropriate for food products, which exhibit a considerable difference in customers’ tastes for different countries. This strategy is disadvantageous in the sense that there is little local receptiveness, which also leads to the high probability of loss-making in the local markets and that an organization can only make small adjustments to the product in a bid to make it suitable for the market.
Another limitation associated with this strategy is that during the standardization of products, a significant extent of coordination is necessary for all international operations. On my side, I would propose an international strategy for business companies to open their branches in the overseas markets. This proposed strategy is beneficial in the sense that it will permit business companies to make cost-benefit by moving production operations to presumable low-cost regions of the world, thereby helping them to gain economies of scale. With the manufacturing of standardized products at a low price as well as high quality, business companies build their reputations as well as their competitive advantage. Such organizations can become global market leaders.