Question

Large firms operating globally develop organizational strategies based on the type of industries and businesses in which they compete. Explain the four basic international business organization strategies discussed in the course and the Hill text. Then identify which of the four strategies Volkswagen has used over time and the one it is now trying to implement. After identifying the strategies it has used and is now trying to implement please describe and explain how and why it is pursuing the strategy it has currently selected in order to penetrate certain markets and meet global competition in its industry.

You should comment on the success and/or failure of its approach and implementation and how it may have modified its organization, supply chain or marketing over time given changes in its markets, its suppliers and its industry’s competitive structure.

Answer 1

The FOUR basic international strategies are as follows : -

• Globalization - Same products in all countries
• Transnational - Mix of domestic and Globalization strategies
• International- Operations majorly in foreign countries
• Multi domestic - Customized strategy in each country for its product

Volkswagen Multi Domestic strategy by customizing programs for different audiences in different markets in different languages so consumers consume content as per preference.This helps penetrative into various emerging markets.It also gives various distribution, and various programs as per target segments.

The approach is highly successful because it attracts wide array of consumers and help bring down production costs by economies of scale. However it can optimise its costs and supply chain by aggregation of all contents producers across globe and offering low cost service to gain market share with premium content which can disrup market structure altogether.