Question

What co-operation strategies should be adopted at the international level?

Answer 1

Multi domestic Strategy- Multidomestic strategy maximizes local responsiveness by giving the local business units in each country decentralizing decision-making authority to create products and services that are optimized for their local markets. For example, where Thomas Friedman's flat-world thesis does not apply, a multidomestic strategy would be appropriate. Within each country a multidomestic strategy focuses on competition and maximizes local responsiveness. It assumes the markets are different and thus are segmented by country boundaries. In other words, the needs and desires of consumers, the conditions of industry (e.g. number and type of competitors), the political and legal structures and social standards vary by country.

Global Strategy-Unlike a multidomestic strategy, the home office centralizes and controls a global strategy and aims to maximize global efficiency Under this strategy, products are much more likely to be standardized rather than tailored to the local markets. One way to think about global strategies is that in every country on the planet, if the world is flat, you can sell the same products and services likewise. It is assumed that the strategic business units operating in each country are interdependent, and that the home office is trying to achieve integration across these companies. A global strategy therefore emphasizes economies of scale and offers greater opportunities to exploit innovations

Transnational Strategy- Transnational strategy aims to combine the best multidomestic strategy with a global strategy for achieving global efficiency as well as local responsiveness. For many industries this form of strategy is highly desirable and appropriate, given the differences across markets and the similarities fostered by the flatteners. The difficulty is that it is difficult to combine multidomestic and global strategies as it requires the dual objectives of flexibility and coordination to be fulfilled. Companies have to balance against local and global targets.