Question

3. What are the main strengths and weaknesses of the worldwide product division structure?

Answer 1

Strengths of Global product division structure:

• Having the organizational division by product lines will help in efficient research and development around the existing product lines and hence, time taken to market for new product will be lesser.
• Division by product will lead to efficient supply chain structure between the supplier and respective manufacturer as multiple approvals are not required from different functions for running the day to day operations.
• It is very easy to apply "economies of scale" to multiple product lines to achieve profitability.

Weakness of the structure:

• The company will not have knowledge about regional preferences or localization. Hence, any localization strategy will be lacking from the management standpoint.
• Different functions of the organization such as Brand management, marketing, sales, finance will not be coordinated properly.
• Also, the mangement will be highly centralized as it tends to be more top-bottom in the decision making process of the organization.