Question

1. Compare and contrast global, multidomestic and transnational strategies for any three specific firms of your choice. Make sure you explain clearly the differences andstructural reasons for the different strategies by the three firms youchoose.

Answer 1

Introduction:-

Different companies across the globe use different strategies to be able to run their business on a global scale respectively. It is a well-known factor, that companies that look at only one domestic market will in turn earn relatively lesser amounts of money for themselves.

Thus most companies which establish themselves domestically, tend to take the global route and expand their operations beyond the political boundaries of a country which allows them to earn more for themselves.

Case Specifics

As illustrated, different companies end up using different strategies for their growth reasons. These strategies are further different in each approach and may often change as per needs of business eventually.

A brief understanding of all the three approaches listed and of companies which follow the same are as follows:-

Global Strategy:-

In a global strategy, the company considers all market types as being equal to one another, and sells the same uniform products across the globe, with little or no changes in the products and its delivery.

Such companies consider that their product will sell across the globe without necessary requirement for modifications from the domestically produced item respectively.

An example of the same is Apple. The great computing giant manufactures the same products which are then sold across the globe without any major changes. Consistency in the products sold is one of the key factors which differentiates such companies from the others respectively.

Multi-Domestic Strategy:-

A multi domestic company is one, which goes global with the approach of adopting those policies and services which may be favorable for the area they deploy the expansion to.

Companies that follow such strategies believe in the uniqueness of each market and devise plans and strategies accordingly.

For example a company like Mc Donald’s would deploy different strategy and products for a country like America, where pork and beef are common ingredients in a burger which they offer. However, they would change their menu to chicken and vegetarian ones when they operate in India.

This basic nature wherein the company operating changes its products and services because of the beliefs, cultural setting and other similar reasons fall under this category respectively.

Transnational Strategy:-

A transnational strategy is like a middle way between global and multi-domestic strategy respectively. It uses an amalgamation of both the above described strategy in a way that it has its operations in numerous countries, while it divides countries into various sub groups such as Asia Pacific which targets combined countries in one go respectively.

Companies such as IKEA which manufactures furniture is a key example of the same. It has the same strategy for European markets in developed countries whereas it adopts a different methodology in Asia Pacific in countries such as India and China respectively.

Summary and Key Differences among the Three Strategies is as follows:-

As illustrated, different companies will use different strategies which creates this divide of methods which they use to sell their products in the global market.

Here, the key difference in the companies is as follows:-

The companies here consider global markets differently. Companies such as Apple create products with the view of selling them similarly across the globe. On the other hand, Mc Donald’s takes a domestic approach and allows for vegetarian food to be sold in countries such as India with different cultural and social requirements.

A middle approach which is Transnational collectively allows companies to sell its product in a specific area such as Asia Pacific etc.

Please feel free to ask your doubts in the comments section if any.