7. Discuss the ads & dis of the 4 basic strategies for competing globally. Describe the organizational structures & controls that are internally consistent with the relevant strategies Flashcards
List the 4 strategies and their respondent structure
- Global Standardisation Strategy - Horizonal Differentiation - Worldwide Product Divisions
- Localisation Strategy- Vertical Differentiation - decentralised
- Transnational Strategy- Integrating Mechanisms
- International Strategy- Horizonal Differentiation - Worldwide Product Divisions
Ads + Dis for global standardisation Strategy
When there is a demand for low cost and local responsiveness is minimal
ads: You are marketing standardised products + economies scale + money
Eg embal
Dis: Doesn’t work with local responsiveness is high
What is Horizontal differentiation - Worldwide Product Divisions
Concerned about dividing the organisation into foreign subunits
Best for diversified firms
Subunits are self-contained and independent
Ads + Dis of localisation Strategy
Customising products to cater to national differences in tastes and preferences for national markets
Ads: Since specific = charge at a higher price for value
Dis: No mass production
No Economies of scale
What is vertical Differentiation - Decentralised
When control and decision making is made by foreign subsidiaries
Ads: Motivates + Trains them for more senior level
Ads + Dis for transnational Strategy
Low costs through location economies, economies scale and learning effects
Ads: High production, low cost. Depending on leadership styles, can be effective
Dis: Demands = not easy to pursue
What is integrating mechanisms
High coordination is needed
Ads + Dis of international Strategy
Producing the first product in a domestic market and offering the product worldwide
Eg Xereo - First photocopier =
Ads: no competition. charge high
Dis: Head office = charge of marketing strategies and product strategies
