The Global strategyis centralized and controlled by the home office and aims at maximizing global effectiveness. Global companies are the opposite of multi-domestic companies. They offer a standardized product worldwide and have the goal to maximize efficiencies in order to reduce costs as much as possible. Global companies are highly centralized, and subsidiaries are often very dependent on Headquarters. Their main role is to implement the parent company’s decisionsand to act as pipelines of products and strategies. Microsoft is an example of a company that relies on this strategy to meet the needs of the people by adjusting the problem based on the local languages(Edwards, 2022).
The transnational strategyseeks a middle ground between a multidomestic strategy and a global strategy. Such a firm tries to balance the desire for efficiency with the need to adjust to local preferences within various countries. For example, fast-food chains like McDonald’s and KFC rely on the same brand names and the same core menu items around the world. These firms make some concessions to local tastes too. In France, wine can be purchased at McDonald’s. This approach makes sense for McDonald’s because wine is essential in French diets(Bruin, 2017).
The International strategy is often referred to as an exporting strategy. Products are produced in the company’s home country and sent to customers all over the world. Subsidiaries, if any, are functioning, in this case, more like local channels through which the products are being sold to the end consumer(John Daniels, 2018)
The localization strategyoffers lower costs to organizations with better benefits. Localization requires establishing local supply chains which are more effective in terms of costs and time as compared to international supply chains. The companies can source cheaper products as they are locally produced and on time as they need not travel internationally. This helps them to get products as per local tastes and at lower prices. A great example is Walmart company which through its retail stores meets the needs of the population by providing lower prices than its competitors such as Target, Publix, and Winn-Dixie to name a few(Bruin, 2017).
References
Bruin, L. d. (2017, January 27).International Business Strategy. Retrieved from Business-to-you: https://www.business-to-you.com/international-business-strategy/
Edwards, J. (2022, September 28).Mastering Strategic. Retrieved from BC Campus OpenEd: https://opentextbc.ca/strategicmanagement/chapter/types-of-international-strategies/
John Daniels, L. R. (2018).International Business: Environments & Operations.New York: Pearson Education.
Rhonda Ford-Perry
Global strategy covers three areas global, multinational, and international strategies. These strategies help an organization to achieve its goal of international expansion. Companies use this strategy inside its home markets. For example, a dairy company might sell its excess milk and cheese supplies outside its home country. The Apple iPod was following the same strategy in the world. Global decisions begin by considering just how much local variation there might be for a brand.
Transnational strategy is a management approach in which an organization mix its global business activities through close cooperation and interdependence among its headquarters, operations, and international subsidiaries. This type of organization represents a compromise between local autonomy and decision making. It seeks to bring together to integrate globally and the need to give responses to local audiences.
International strategy is a process of accomplishing business expansion in the global market. It includes the business plan in detail on how the business will spread overseas.This starts with the right region of growth, understanding the region, studying the close competitors within the same market niche, defining the business’s goals, studying the resources available, the distribution channel, the pricing theory, and a lot more. For example, Harley Davidson sells motorcycles and do not need to lower their price to adapt the bike to motorcycles standards because buyers want the American look, the sound and power and will pay for that differentiation.
A plan of action compiling a locale’s culture, idioms habits and behaviors to market and deliver goods and services. This strategy needs to be understood by every department when creating new content. Every component will impact localization. For example, Spotahome is an online housing platform that started in Spain 2014 Spotahome have grown in 11 cities. They invested in SEO focused content that’s localized. They assisted with creating and translating content to attract local landlords in each region and tenants that are international. In 3 months, a focused campaign targeted landlords saw a 30% increase in traffic on their website tailored to landlords. They also ranked higher in keywords in all six languages.
References:
Langer, B. (2022, August 23).Localization strategy: Your guide to engaging a global audience. VeraContent.https://veracontent.com/mix/localization-strategy/
What is a transnational strategy? definition and meaning - mba brief. (n.d.) https://www.mbabrief.com/what_is_transnational_strategy.asp