Global Integration/Local Responsiveness Flashcards
What are the four basic strategies to compete in international markets?
Global Standardisation
Transnational
International/Home Replication
Localisation/Multidomestic
What is Global Standardisation?
Based on standardised products worldwide
Centres on world-wide excellence
What is Transnational (Glocal) strategy?
Think globally, act locally
Advantages of transnational strategy?
- Cost effective and locally responsive
- Promotion of innovation in different subsidiaries
- Engages in global learning and diffusion of innovation
Disadvantages of transnational strategy?
- Organisationally complex
- Difficult to implement
Advantages of Global Standardisation?
- Strategic goal to pursue a low cost strategy on a global scale
- Leverages low cost advantages
Disadvantages of Global Standardisation?
- Too much centralised control
- Lack of local responsiveness
What is International/Home Replication strategy?
Emphasises replication of home country competencies
Take products produced for domestic market and sell international with minimal local adaptation
Advantages of International/Home Replication strategy?
- Easy to implement
- Leverages home country advantages
Disadvantages of International/Home Replication strategy?
- Lack of local responsiveness
- Foreign customer alienation
What is Localisation/Multi-domestic strategy?
Focuses on a number of foreign countries/regions each regarded as a stand-alone local market worthy of attention and adaptation
Advantages of Localisation/Multi-domestic strategy?
Max local responsiveness
Local autonomy
Disadvantages of Localisation/Multi-domestic strategy?
Duplication costs
What is the integration-responsiveness framework?
MNC’s subject to conflicting pressures for cross-border integration and local responsiveness
Explains strategies and organisational settings of MNC’s
Draw the integration-responsiveness framework
high | Global | Transnational/Glocal
| Standard- |
| isation | (Global Matrix)
| (GPD) |
|___________ |________
cost reduction | Home | Multi-domestic
| Replication |(Geographic
| (International | Area)
low |___Divison)_ _|__________
low high
local responsiveness
What are the four organisational structures appropriate for each strategy?
Global Product Divisions
Global Matrix
International Divison
Geographic Area
Match the strategy to the organisational structure
Global Standardisation = Global Product Divisions
Transnational = Global Matrix
International/Home Replication = International Divison
Localisation/Multidomestic = Geographic Area
Integration-responsiveness framework abbreviated
GS (GPD) | TS/Glocal (GM)
_________|______________
HR (ID) | MD (GA)
Local responsiveness
What is Global Product Division?
- Treat each product division as stand alone entity
- Supports global standardisation
- Full worldwide responsibility for its activities
e. g. EADS
What are the advantages of Global Product Division?
- Attention to cost efficiencies
- Reduction of inefficient duplication in multiple countries
What are the disadvantages of Global Product Division?
Little local responsiveness
What is Global Matrix?
Manager may manage Asia and Product Division 1
EU
HQ /
| \ Asia\_\_O - Manager
| |
|\_\_\_\_\_\_\_\_PD1
|
PD2What are the advantages of Global Matrix?
- Often used to alleviate disadvantages associated with GA + GPD structures
- Intended to support goals of Trans/Glocal
What are the disadvantages of Global Matrix?
- Often difficult to deliver
- May add layers of management
- Slows down decision speed and increase costs
- Whilst not showing significant performance improvement
