An important part of launching and developing a business is to select the target audience and adapt the products and services to its needs and desires. However, it might be a challenge for the companies operating on an international scale. They should evaluate the adequate level of local adaptation of their products and the needed amount of quality control that may drop with the increased differentiation. Thus, two major business strategies emerged that suggest two possible solutions for international corporations – the multinational and the global strategy.
It is important to note that international business strategies build a continuum of approaches in operating on the global level. The multinational (or multi-domestic) strategy and the global strategy are the polar points of this continuum. The multinational strategy “emphasizes responsiveness to local requirements” with no major regard to “cost or efficiency” (Reed et al., Types of International Strategies, 2020, para. 5). Reed et al. (2020) illustrate it with Netflix, which adapts its programming to different regions (Types of International Strategies, para. 5). The global strategy suggests “sacrificing responsiveness to local requirements in favor of lower costs and better efficiency” (Reed et al., Types of International Strategies, 2020, para. 6). Reed et al. (2020) note that minor adaptations are possible within this strategy, such as local language adjustments in Microsoft products, but they are not its focus (Types of International Strategies, para. 6). In brief, the major difference between the strategy types is the focus either on the regional adaptation or on the cost and efficiency.
In conclusion, the multinational strategy and the global strategy are two different ways of operating internationally. The first one suggests the products’ adaptation to the local tastes and preferences. Contrastingly, the latter prioritizes quality control by allowing only minor regional variation from the standard products and procedures. Each international corporation chooses the strategy that fits their goal the most or finds a balance between the two options.
Kennedy, R., Jamison, E., Simpson, J., Kumar, P., Kemp, A., Awate, K., & Manning, K. (2020). Strategic Management. (A.Walz, Ed.). Pamplin College of Business in association & Virginia Tech Publishing. Web.