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MGT 491 final Flores

Terms in this set (64)

- Deals with the pressures an MNE faces for cost reductions and local responsiveness*Local responsiveness: the need to tailor product and service offerings to fit local consumer preferences.
International strategy - Leverages home-based core competencies- Sells the same products or services in both domestic and foreign markets- Advantageous when the MNE faces:Low pressures for local responsivenessLow pressures for cost reductions- Often used successfully by MNEs with: Large domestic markets*Strong reputations and brand names- E.g., Rolex and Harley Davidson
Multidomestic strategy - Used to try and maximize local responsiveness- MNEs hope that local consumers will perceive their products or services as local ones.- This strategy arises out of the combination of:High pressure for local responsivenessLow pressure for cost reductions- Can be costly and inefficientDuplication of business functions across countries*E.g., Nestle and Philips
Global-standardization strategy - Attempts to reap significant:Economies of scale & location economiesThrough global division of labor where capabilities are at the lowest cost- Arises out of the combination of:High pressure for cost reductions*Low pressure for local responsiveness- Price becomes the main competitive weapon- E.g., Infosys, Lenovo, Cemex
Transnational strategy- Strategy that attempts to combine:Benefits of a localization strategy High local responsivenessWith a global-standardization strategyLowest-cost position attainable- Arises out of the combination of:High pressure for local responsiveness*High pressure for cost reductions- Used by MNEs that pursue a blue ocean strategy- Difficult to implement - E.g., P&G, McDonald's