Global Strategy vs. Multicountry Strategy

Only available on StudyMode
  • Download(s) : 2186
  • Published : May 18, 2008
Open Document
Text Preview
Introduction:

Thompson , Strickland and Gamble (2005) have differentiated between two strategies based on the type of competition ; Multicountry Strategy , and Global Strategy They disused the suitability of each strategy as stated below:

"A multicountry strategy is appropriate for industries where multicountry competition dominates and local responsiveness is essential. A global strategy works best in markets that are globally competitive or beginning to globalize."

So, for any successful business decision maker, he/she should be aware of those factors that will affect his/her strategy.

I believe after reading the assigned texts that Global Strategy succeeds when products and services requirements from country to country are similar and close. It is also suits global or emerging markets, those markets in which global competition exists.

On the other hand, multicountry strategy works when local cultures and needs differ from country to another, which in turn affects the product's specifications. Those changing needs demand for more customizable products and services.

Another very important point is the governmental regulations and trade barriers. Few years ago , I was working in project with the Public Authority of Industry to establish an Enquiry Unit as an obligation on Kuwait after signing the TBT agreement.

I also know from my career experience as industrial engineer in Egypt , that all international products manufactured in Egypt , should contain 40% of the components from local providers. This mandatory governmental regulation lead Car manufacturers to change in design and specifications , in order to easily source these components from the local market.

Global Strategy:
For those organizations that apply Global Strategy , they need to uniform and coordinate strategic decisions globally. These firms usually work in industries , products , and services that have high global demand. And they may compete local rivals as well as international competitors. Companies that chose to employ global strategy gain the advantage of distributing business activities among the countries they operate in , in a way that enable them to minimize costs and create a competitive advantage.

According to Thompson , Strickland and Gamble (2005), these companies can " pursue same basic competitive strategy worldwide (low-cost, differentiation , best-cost, focused low-cost, focused differentiation) – with minimal responsiveness to local conditions." I believe this is a result of selling same products and services with no or minor changes in specifications. This also can help in employing a unified marketing strategy with minor changes driven by local cultures. These companies can also benefit from market surveys, customer feedback in order to enhance the product and implement those modifications in other countries.

Multi-country Strategy:

The multi-country strategy is suitable for those companies that work in industries affected by local cultures and local competitors.

Employing such a strategy force the company to be responsive to local demands , and develop different types , categories or versions of products according customers needs and requirements.

This strategy is difficult to implement and requires from huge investments in infrastructure , as the company may need to establish many factories and facilities to produce different product types.

Also they may need to devise marketing plans that are highly customizable and driven by local conditions.

Product (1): Personal Computers

A personal computer is (Merriam-Webster on line Dictionary): a general-purpose computer equipped with a microprocessor and designed to run especially commercial software (as a word processor or Internet browser) for an individual user.

From this , the key design specifications are the same worldwide. And every key player in the market enhances design through massive research and development efforts. On the...
tracking img