Question

The Four International Strategy Models

Please review the four core strategy models – international, global, multi-domestic, and transnational that may be executed by a company looking to expand overseas and comment on at least two advantages and two disadvantages of the strategy you selected.

Answer 1

The differ et types of global strategies are mentioned below=

International strategy – In this model the local business units are allowed to operate independently but when it comes to new processes, methods, and new product development and know-how, they have a greater dependence on the headquarter. There is low pressure for global integration and local responsiveness. This strategy mainly focuses on faster development in the world.

Advantage= It has the capability to gain economies of scale. The facilities can be located at the best location
Disadvantage = There is a tough decision-making process to select the location. It has a lot of trouble while knowledge transfer and resource allocation

Global Strategy= This method mainly focuses on the global efficiency. The central control unit closely controls and manages the various activities and operations of these units. The organization is able to enjoy the economies of standard product design, world-level production and centralized operation.

Advantages = It has a lower cost resulting in the scale and scope of economies. The company can enjoy the advantage of a global brand and fame.

Disadvantage- The local needs may remain unaddressed. It can result in greater tariffs and transportation costs.

Multinational strategy = The focus is on local responsiveness and to offer greater differentiation. In this method, the foreign units operate completely independently and these units have a greater response to the local needs and changes

Advantage= It can address the local need better. It has a better response to the local threat, opportunities

Disadvantage= It can restrict resource distribution. It is not good for a worldwide competitive advantage.

Transnational strategy= The focus remains on global efficiency, high level of innovation, high responsiveness. The units have close interdependence and it creates the base for the integration of global activities and this facilitates mutual corporation between the foreign units and the headquarter.

Advantage = It integrates the benefits of both local and global integration. It has greater flexibility.

Disadvantage – It is quite complex to implement. It has a more costly and time-consuming implementation

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