Question

In the integration-responsiveness framework, what is transnational strategy? Why it is difficult to implement?

Answer 1

Transnational strategy seeks to mix the most effective of multidomestic strategy and world|a worldwide|a world} strategy to urge each global potency and native responsiveness. for several industries, given the variations across markets and therefore the similarities being fostered by the flatteners, this manner of strategy is very fascinating and acceptable. the problem is that combining the multidomestic and world methods is tough to try and do as a result of it needs fulfilling the twin goals of flexibility and coordination. For example-

The Ford Motor Company and BMW square measure samples of corporations following a multinational strategy. Ford, as an example, is specializing in the “world automobile,” building one core automobile which will be oversubscribed globally. This strategy lowers Ford’s development prices, as a result of instead of developing completely different cars for various countries or regions, Ford can sell identical automobile to all or any markets. the globe automobile strategy, however, poses a serious hurdle: the way to style a automobile that appeals to shoppers in many various countries. To tackle the difficulty, Ford took a page from BMW, that uses the idea of “fashion forward” once coming up with its three Series cars for multiple markets. The secret, in keeping with Verena Kloos, president of BMW’s DesignworksUSA studio in American state, is to indicate shoppers what ensuing massive factor is, not replicate what they assume currently. Ford’s world promoting chief, sees it, the world attractiveness of the three Series rests on trust and aspiration. individuals worldwide see identical style, that builds trust through presence and familiarity and leads them to draw a bead on to possess the automobile themselves.

Why it's troublesome to implement multinational strategy-

A translational strategy seeks to realize each world integration and national responsiveness. a real multinational strategy is troublesome to realize, as a result of one goal needs shut world coordination whereas the opposite goal needs flexibility. but several industries square measure finding that, though exaggerated competition means that they have to win world potency, growing pressure to satisfy native wants demands responsiveness. One company that effectively uses a multinational strategy is Caterpillar, Inc., a significant instrumentation manufacture. Caterpillar achieves world efficiencies by coming up with its product to use identical parts and centripetal producing of parts during a few giant scale facilities. However, assembly plants situated in every of Caterpillar ‘s major markets add sure product options tailored to satisfy native wants.

most transnational corporations need to realize a point of world integration to carry prices down, even world product could need some customization to satisfy government laws in numerous countries or some trade to suit client preferences additionally, some product square measure higher suited to standardization than others. Most giant transnational companies with numerous product and services can conceive to use a partial multi-domestic strategy for a few product or service lines and world methods for others. coordinative world integration with a responsiveness to the heterogeneousness of international markets may be a troublesome leveling act for managers however is progressively vital in today’s world business world.