Question

1. What are. different approaches. to global market? global versus. local responsiveness.?

Answer 1

Question 1.

Different approaches to the global market

There are mainly four approaches to do business in the global market. The following are those approaches in this regard.

Ethnocentric Approach

This is an approach in doing global business where a company gives importance to its home country market and all its strategies are formulated for addressing the needs of the home country market. Usually, these companies view international business as an avenue for selling excess products if any. This strategy is normally applied by small companies with less capacity to take risks involved in international businesses. All the employees of those companies following the ethnocentric approach would have employees recruited from the home country itself.

Polycentric Approach

Polycentric Approach is an approach in doing business in global market where a company would have strategies for addressing the needs of the host country market. The employees of those companies following the polycentric approach would have employees recruited from a particular host country.

Regiocentric Approach

Regiocentric Approach is an approach in doing business in a global market where a company would have different strategies for addressing the needs of a particular region. The policies for each of the regions would be furnished by different regional offices.

Geocentric Approach

Geocentric Approach is an approach in doing business in a global market where a company would have common strategies for addressing the needs of the entire world. Usually, big business enterprises are adopting such a strategy.

Global versus. Local responsiveness

Global integration means the degree to which a company is able to provide similar products across the globe. Local responsiveness means the degree to which a company is able to address the needs of the different local markets. The clash between Global Integration and Local Responsiveness is an important problem faced by the enterprises engaged in the global market. On the one hand, companies need to standardize their products, operations, etc. On the other hand, companies need to address the needs of requirements of the customers in different host country markets, comply with the regulations of the host country, etc. So companies engaged in the global business need to strike a balance between global integration and local responsiveness. Alliances with competitors and non-competitors are the best strategy dealing with this challenge.

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