ogood for when pressures for global integration and local responsiveness are lowousually companies with distinctive capabilities together with strong reputation and brand nameso[Google centralizes R&D in California]oDownside is that the home country view limits the view of the business with risks of skilled local competitors getting ahead.
-Multi-Domestic strategy maximizes local responsiveness. It is based on different product or service offerings and operations in each country depending on local market conditions and customer preferences. oEach country manager has considerable autonomyoLoosely coordinated internationallyoCollection of independent units with value chain specific to the countryoGood when strong benefits to adapting to local needs and when there are limited efficiency gains from integration.oCommon in food and consumer products and marketing driven companiesoDownside is manufacturing inefficiencies, costly product and service variations and risks towards brand and reputation if become too diverse-Global strategy maximizes global integration. The world is seen as one marketplace with standard products and services that fully exploit integration and efficiency in operations. ofocus is capturing scale economics and exploiting location economies worldwideoexact opposite of multi-domestic strategyomost beneficial when there are substantial cost or quality efficiency benefits from standardization or when customer needs are homogenous across countries. oCommon for commodity or commodity like products-Transnational Strategy is the most complex strategy that tries to maximize both responsiveness and integration. Aim is to unite key advantages of the multi-domestic and global strategies while minimizing their disadvantages. It also maximizes learning and knowledge exchange between units. Products and services and operational activities are, subject to minimum efficiency standards, adapted to local conditions in each country. othe value chain includes centralized manufacturing to increase efficiency combined with distributed assembly and local adaptations.oCoordination encourages knowledge flows from wherever ideas and innovation come fromo[General electric]Key methods for expansion are mergers, acquisitions and alliances. A merger is the combination of two previously separate organizations in order to form a new company. An acquisition is when an acquirer takes control by purchasing a majority of shares in a target company. M&As aim to improve the competitive advantage of the companies involved by:-Extension: extending a firm’s reach in terms of geography, products or markets.o[FB buys WhatsApp to capture new products and markets]-Consolidation: bringing together two competitors can have 3 benefits
oIncreases market power by reducing competitionMight allow to raise pricesoCombination can improve efficiency by reducing surplus capacity or sharing resourcesoThe greater scale may increase production efficiency or increase bargaining power with suppliers forcing them to reduce prices.