6 market strategies for int companies

1) Define both views

• Levitt (globalization/standardization): Markets are becoming more similar, so firms should standardize products globally to gain scale economies and lower costs.

• Kotler (differentiation): Markets remain different, so firms should adapt to local needs because culture, income levels, and institutions vary.

Mnes face tension bedtwwen standardisation and adaption. Mc donald’s stamdaedization: process & supply chain

Adaption: menu changes

2) Give key arguments for each side

Levitt – why standardize?

• Homogenization (media, internet, travel) → tastes convergence

• decreasing transportation costs

• Market liberalization

• Benefits: cost reduction, consistent global brand, efficiency

Kotler – why adapt?

• Natural heterogeneity of national markets (culture, language, norms)

• Different economic development stages

• Different industry structures & demand behavior

• Benefits: better customer fit, higher acceptance, compliance with local rules

MNE (Multinational Enterprise)

• Definition: An enterprise operating in multiple countries, typically with FDI/subsidiaries abroad.

  MNC (Multinational Corporation)

• Definition: A corporation that operates in multiple countries, typically with FDI/subsidiaries.

International Company:

operates mainly from home country but sells abroad (f.e. export)

Flashcard 1: Global Strategy

• When? High cost pressure / global integration, low local responsiveness

• How? Standardized product, centralized value chain

• Goal: Lowest cost + economies of scale

Flashcard 2: Multidomestic Strategy

• When? High local responsiveness, low global integration

• How? Different products/marketing per country (strong adaptation)

• Goal: Best local fit (but higher costs)

Flashcard 3: International Strategy

• When? Low–moderate integration, low local responsiveness

• How? HQ develops core competencies; subsidiaries implement/extend them

• Typical: Often starts with exporting

Flashcard 4: Transnational Strategy

• When? High global integration and high local responsiveness

• How? Global efficiency + local adaptation; network of specialized subsidiaries

• Note: Most complex / hardest to manage