FOUR INTERNATIONAL OPERATIONS STRATEGIES
Operations managers of international and multinational firms approach global opportunities with one
of four operation strategies:
International strategy, Multidomestic strategy, Global strategy, Transnational strategy
The Four Strategies Are Related to Two Variables:
A- Local responsiveness: the degree of differentiation among the strategies followed by a certain company
in every country to adapt the products to the local market.
B- Cost reduction: the degree of cost advantage that the strategy gives to the company over the industry
rivals.
1- International Companies: are importers and
exporters, they have no investment outside of
their home country. (uses exports and licenses to
penetrate the global area.)
2- Global Companies: have a high degree of
centralisation, with headquarters coordinating the
organisation to seek out standardisation and
Cross-cultural learning thus generating economies
of scale.
3- The Multidomestic Strategy: has decentralised authority by creating branch, franchises or joint ventures
with substantial independence.
The advantage of this strategy is maximising a competitive response for the local market, however this
strategy has little or no cost advantage.
4- A Transnational Strategy: exploits the economies of scale and learning, as well as pressure for
responsiveness,
Transnational describes a condition in which material, people, and ideas, cross national boundaries.
Transnational companies are thought of as “world companies” whose country identity is not as important as
its independent network of worldwide operations.
#Administration #Operationsstrategies
