Strategies and Organisation Flashcards
What are the 4 strategies
1- Transnational
2- Global Standardization
3- Localisation
4- International
Why implement a Strategy
Strokosch- in order to achieve objectives commonly profit and social growth
What is Transnational Strategy
Hill 2022- the head office retains strategic and operational control over international branches. These subsidiary branches tailor marketing and sales strategies to local preferences
Strokosch 2024- requires high cost reduction and local responsiveness
Adv of Transnational Strategy
Hill 2022- can exploit experience curve to reduce costs as needed
indeed 2024- local responsiveness as can use local employees to gain insight how to alter products or marketing to local culture- increased sales
Disadv of Transnational Strategy
Hill 2022- high cost reduction and local responsiveness pressures are hard to achieve simultaneously as often increased local responsiveness increases costs therefore forcing firms to often prioritise one
Example of Transnational Strategy
Bayan tech 2024- Mcdonalds maintain high cost reduction and local responsiveness despite large scale operation still localises some items like the shrimp burger in Japan or the McRib in some European countries, USA and Canada
What is Global Standardization
Indeed 2024- focuses on creating a standardised product to be sold globally with little to none alterations.
Hill 2022- usually in markets that econ of scale is key for competitiveness and has high cost pressures and little local responsiveness
Adv of Global Standardization
Hill 2022- experience curve effects as increasing output decreases costs thus increasing profits
Strokosch 2024- exploit Location economies- by dispersing a firms value creation to locations where can be completed most efficiency and effectively. this decreases costs increases speed and quality
Disadv of Global Standardization
Strokosch 2024- lack of local responsiveness
Indeed 2024- this lack of local responsiveness leads to decreased sales as brand lacks identity as doesn’t represent any culture making everyone feel not represented at all
Example of Global Standardization
Bayan Tech- Apple as have a minimalistic design sells same product globally and even changed all charging ports to usb-c in alignment with new EU law
What is Localization Strategy
Indeed 2024- this strategy aims to tailor the product and marketing to suit local consumers making it ideal to penetrate foreign markets
Hill 2022- has high local responsiveness and low cost reduction pressures
ADV of localization
Strokosch 2024- customisation allows firms to sell in markets that had barriers to enter such as regulations or culture. gains competitive adv
Bayan tech 2024- highly personalised experience leads to higher customer satisfaction and brand reputation thus creating brand loyalty in new market
Disadv of Localization Strategy
Strokosch 2024- high costs as cant use location economies or experience curve meaning firms must have the resources and funds to survive and afford this strategy
Example of Localization Strategy
Bayan tech 2024- Nestle have a very diverse prodyct portfolio that alters from one location to another such as the macha kitkat in Japan. they also allow each reginal brand to control marketing, products and operations
What is International Strategy
Strokosch 2024- takes products from domestic markets and sell them internationally without alterations
Hill 2022- low cost reduction and low local responsiveness pressures
Adv of international Strat
Strokosch 2024- requires little work for firms as they transfer core competencies to foreign markets utilising a proven successful strategy lowering costs as no R&D or changes
Bayan tech 2024- lowers risks as tested in domestic market first before exporting internationally can save a lot of money
Disadv of International Strategy
Hill 2022- lack of local responsiveness will make it hard to sell in culturally diverse locations due to no alterations of product or marketing that is often needed for success
Example of International Strategy
Bayan Tech 2024- Netflix as they operate globally but will test local responsiveness before streaming world wide to ensure higher chance of success such as Squid Game and Money Heist
What organisational structure is best for each Strategy
1- Transnational and matrix
2- global standardization and world wide product division
3- localization and world wide area structure
4- international and world wide product division
Why Transnational use Matrix Structure
Strokosch 2024- as both have high product diversity and local responsiveness
Fiveable (2024)- allows firms to collab globally on standardised products whilst also customising strategies aligned to local markets. this collab decreases costs through centralised R&D, bulk production and streamlined operations maximise efficiency
Transnational and matrix control systems
Hill 2022- requires exceptionally complex and efficient control systems due to multiple reporting relationships and shared authority. higher costs to maintain and decreased efficiency if conflicts arise
Why Global Standardisation use WWPD
Strokosch 2024- HQ maintain majority of control over decisions however also allows localised decisions to be made
Global Standardisation and WWPD- control systems
Hill 2022- strat has high control systems and as high coordination and need for cultural controls. this requires time and effective collab to ensure all tasks are completed in alignment with global strategy
Why Localization Strategy use WWAS
Strokosch 2024- no need for integrated mechanisms making this simple structure good. this is cheap to control as each subgroup does their own thing
Hill 2022- operation and strategic decisions are decentralised increasing local responsiveness that is required
Disadv of WWAS for Localisation
Hill 2022- can be difficult to transfer core competencies and skills between areas
Why International Strategy use WWPD
Strokosch 2024- WWPD aligns with cost effectiveness and simplicity of international strategy needs
Strokosch 2024- moderate control demands similar to WWPD
Disadv of WWPD for International Strategy
Hill 2022- limited control it proves local or country managers are viewed as less important to the product division managers leads to lack of local responsiveness and lower customer satisfaction
