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Unformatted text preview: rought convergence of tastes and preferences of consumers.
Modern global corporations must “seek sensibly to force suitably standardized products and practices in the entire globe.”
Companies which do not pursue standardized products will fall behind those that do. Christopher Bartlett and Sumantra Ghoshal (Managing Across Borders, HBR Press, 1989) ► Complete standardization of products is not appropriate. ► Global preferences still exist and companies must recognize these differences. ► In certain industries, some companies have gained advantage by emphasizing local preferences and moving away from standardized products. STRATEGIC CHOICES
► Four basic strategies to enter and compete in the international environment: ► ► International strategy “Here it is”
Localization strategy”Act local” Global standardization strategy “Be costeffective” Transnational strategy – “Be costeffective and Act local” Companies may evolve from one strategy to another or they may use one strategy for one business unit or product line and a different strategy for another.
Example: Proctor & Gamble might purse global strategy for disposable diapers, but multidomestic (localized) one for detergents in Asian markets. Fig. 12.7
p 427 Choosing a Strategy
Choosing a Strategy !
“Low” does not
The appropriateness of each strategy depends on the amount of pressures
for cost reductions and local responsiveness. Global Standardization Strategy: Global Standardization Strategy: “Be costeffective” ► Focus is on increasing profitability through a low cost strategy: maximize cost reductions that come from experience curve effects and location economies
► Production, marketing, and R&D concentrated in few favorable functions
► Market standardized product to keep costs low
► Effective where strong pressures for cost reductions and relatively low demand for local responsiveness
(emphasis on efficient operations)
► Example: Semiconductor industry, Intel, Texas Instruments, Motorola....
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This document was uploaded on 02/26/2014.
- Spring '13