Global, Multidomestic, & Transnational Business Strategies: Global Efficiency & Local Responsiveness

Summary

This video explores corporate and business-level strategies in international business. It covers three key corporate strategies: global, multi-domestic, and transnational. A global strategy focuses on standardization and economies of scale, while a multi-domestic strategy tailors decisions to local markets. The transnational strategy balances both global efficiency and local adaptation. Additionally, the video touches on business-level strategies such as cost leadership, differentiation, and focus. It emphasizes the importance of adapting these strategies to international expansion by considering factors like infrastructure, labor, and local resources to achieve success in different markets.

Takeaways

• 🌍 International business strategies operate at both corporate and business levels.
• 🏢 Corporate-level international strategies include global, multi-domestic, and transnational approaches.
• 🌐 A global strategy centralizes decisions to achieve economies of scale and does not adapt to local markets.
• 🏬 A multi-domestic strategy focuses on local market adaptation, allowing decentralized decision-making.
• ⚖️ A transnational strategy balances global efficiency with local market adaptation.
• 🍟 McDonald's and KFC are examples of companies using transnational strategies by adapting menus to local preferences.
• 💡 Business-level strategies include cost leadership, differentiation, and focus strategies.
• 📉 Cost leadership strategies aim to attract customers by offering lower prices.
• 💎 Differentiation strategies focus on uniqueness and high quality to attract customers.
• 📊 International expansion supports business-level strategies by leveraging factors like low-cost labor, infrastructure, and market opportunities.

Q & A

What are the two levels of strategies mentioned for international business?

The two levels of strategies are corporate-level and business-level strategies.

What are the three types of corporate-level international strategies?

The three types of corporate-level international strategies are global, multi-domestic, and transnational.

What is a global strategy in international business?

A global strategy focuses on company-wide standardization and economies of scale, with major decisions centralized at headquarters. It does not adapt to local market conditions.

Can you give an example of a company using a global strategy?

Payless ShoeSource used a global strategy where inventory ordering was centralized at the headquarters, regardless of store location.

How does a multi-domestic strategy differ from a global strategy?

A multi-domestic strategy assumes that markets differ from country to country, so each country tailors its business strategy to local needs. This approach is decentralized.

What are some examples of companies using a multi-domestic strategy?

Coca-Cola sells different flavors in various countries, and Nestlé offers different brands and products depending on the country.

What is a transnational strategy in international business?

A transnational strategy seeks to balance both global efficiency and local adaptation by combining centralized control with decentralized decision-making for local responsiveness.

How does McDonald's use a transnational strategy?

McDonald's uses the same menu globally to benefit from economies of scale, but also adapts some items locally to meet regional preferences, such as different menu options in various countries.

What are the three main business-level strategies mentioned?

The three main business-level strategies are cost leadership, differentiation, and focus.

How can international strategies support business-level strategies?

International strategies can support business-level strategies by leveraging factors such as low-cost manufacturing, local infrastructure, and natural resources that are specific to each region.