4.11 Global Strategies

Business today is conducted on a global scale.  Even a business with a target market in only one country may be dependent on a supply chain that involves many countries.  Let’s look at ways for a business to go global.

There are four main global strategies.

Home Replication

In this strategy, a business will duplicate what it does in its home country in another country.  This would include products, marketing, and distribution.

Multi-domestic

A multi-domestic strategy recognizes that different countries have different needs and characteristics.  In this strategy a new company is formed in the target country with products and services tailored to its needs and customs.

Global

A global strategy  is one where a business creates the product in its home company and then distributes it world-wide.  A good example of this is Microsoft, whose products are designed and developed in the U.S. and the same products are distributed world-wide.  Yes, there are language changes but they are done within the context of the software developed in the U.S..

Transnational

A transnational strategy is one where the firm treats the world as one great big entity within which it does business.  It designs products with the best R&D people, manufactures where costs and regulations are most favorable, and distributes the products world-wide.  An example of this is Apple, whose products are designed in the U.S., manufactured in China and India, and distributed across the world.