BUS350 - Ch.11

Thisstrategymakessensewhentherearelowcost

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Unformatted text preview: strategy focuses on increasing profitability by customizing the firm’s goods or services so that they provide a good match to tastes and preferences in different national markets. This strategy makes sense when there are substantial differences across nations with regard to consumer tastes and preferences, and where cost pressures are not too intense. 29 of 40 Transnational Strategy Question: When does a transnational strategy make sense? A transnational strategy tries to simultaneously • achieve low costs through location economies, economies of scale, and learning effects • differentiate the product offering across geographic markets to account for local differences • foster a multidirectional flow of skills between different subsidiaries This strategy makes sense when there are both high cost pressures and high pressures for local responsiveness. 30 of 40 International Strategy Question: When does an international strategy make sense? An international strategy involves taking products first produced for the domestic market and then selling them internationally with only minimal local customization. This strategy makes sense when there ar...
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