Unit 3

Question 1

Forces for local adaption or global standarization

Answer 1

On one side, a company can make a choice about:

• producing close to the customer (local production)
• producing wherever the factor costs are cheaper (global production)
• producing in one place (limited location production)

Question 2

Forces for local adaption or global standardization when talking about the delivery (sales, marketing etc)

Answer 2

a company can often have substantial cost and efficiency savings by standardizing what they do

success in a particular market may require adapting product/service to local market conditions

Every company has some level of adaption to local conditions, but there are a number of factors that can determine how much adaption is required. These can well summarized in the video on McDonalds.

Question 3

forces for global standardization

Answer 3

Nowadays, there are less barriers than before to globalized activity.
National and international legal, technical, and financial regulations are more aligned, making it easier to operate in a similar way in different places.

As the world becomes more interconnected, ideas, people, and products move more easily from place to place

Question 4

McDonalds

Answer 4

As a global brand, much of the operations are standardized. Yet food is still very culturally specific. It is also a sector with very strong regulatory requirements, which vary from region to region.

Some production global, and a lot of food prepared locally

strong in both local and glocal

Question 5

FORCES FOR GLOBAL STANDARDIZATION VERSES FORCES FOR LOCAL RESPONSIVENESS

Answer 5

Amongst the things we need to consider are:
The need the product/service is satisfying
Cultural norms and differences
Technical/Regulatory norms and differences
Availability of resources & skills

Question 6

Export strategy (chanel)

Answer 6

low in local reponsiveness

low in efficiency considerations

Question 7

Global strategy (nike)

Answer 7

low in local responsiveness
high in efficienfy considerations

Maximize global integration.
Whole world seen as single market and customer needs homogenous.
Aims are to capture economies of scale and location factors (vertical MNC activity).
High level of control from headquarters and strong uniform governance mechanism.
No focus on differentiation, all subsidiaries managed the same.
Examples: Texas Instruments, Intel, Caterpillar, Otis Elevators, Sports clothes & equipment, IKEA.

Question 8

Transnational strategy

Answer 8

High in local considerations
high in efficiency considerations

Transnational strategy:
Tries to balance standardized ideas and local adaption.
Aims to gain cost efficiencies and economies of scale.
Products produced with minimum standards and adapted accordingly to local needs.
Strong emphasis on cross-cultural learning to promote innovation.
Mix of central control and decentralized decision-making
Can be quite complex and difficult to find the right balance
Examples: Nestle and McDonalds

Question 9

Multidomestic strategy

Answer 9

low in local responsiveness
high in efficiency considerations

Maximizes adaption to local needs.
High level of local autonomy for managers.
Some loose coordination from headquarters.
Can be risky to brand reputation if too much variation develops
Examples: MTV.