Question

In: Economics

what are the sources of pressures for local responsiveness?

what are the sources of pressures for local responsiveness?

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Expert Solution

Following are the sources of pressures for local responsiveness for a firm

  1. Differences in the taste and preferences of the consumers: Taste and preferences of consumers differ from one country due to traditional reasons or due to climatic factors. So, a firm needs to delegate the production and marketing functions to the subsidiaries operating in different countries. For example, taste and preferences of consumers living in a temperate country will differ from a country located in the tropical region.
  2. Differences in infrastructure: Firms need to adapt according to the infrastructure existing in a country. For instance, while in the US automobiles have the left-hand drive, in Great Britain right-hand drive vehicles are used.
  3. Host Government Demands: This becomes important as it determines the kind of business environment will a firm face. For instance, a welfare-oriented socialist country will have a lot of focus on providing either very cheap or free of cost healthcare service. For a pharmaceutical company business environment in such a country is completely different from a country that promotes market-oriented growth.

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