GrowE-BUSN604 Week 5

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American Public University *

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Jan 9, 2024

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1 Strategies on International Economics Ethan Grow American Public University BUSN604: Fundamentals of Business Analysis Xiaodong Wu 09/10/2023
2 Strategies on International Economics There are two key concerns or categories of metrics that assist a company’s upper-level management in deciding business strategy; these concerns are global integration and local responsiveness. Global integration is how well a company’s current business strategies, manufacturing methods and product generation can be applied in foreign markets. Local responsiveness is a measure of how much change must be implemented to make their products and methods marketable and otherwise acceptable in those foreign markets. A further breakdown of these two categories gives us four different business strategies for global market applications: export, standardization, multidomestic, and transnational (Bruton & Bruton, 2023). Exactly how each strategy will apply to different countries’ markets can also be examined by taking cultural differences into account, and moving forward with business that is mutually beneficial, with clear communication and hierarchal needs met. Standardization Strategy Standardization is the method of applying business practices on a global scale with as little customization as possible, or alterations. Some examples are the iPhone, or computers/server machines made by Dell, HP, etc. because information technology requires little customization beyond human interface language (Bruton & Bruton, 2023), IT companies can rely on standardization strategies to supply their products worldwide without much concern for altering their product in each country. Culture must be considered when making decisions on standardization because any subtle differences in culture that have to do with the product being sold can change how that company should market, produce, and distribute their products. To continue the IT company example, culture must be considered when
3 programming phones with certain languages and complying with internet access policies and laws. Multidomestic Strategy A multidomestic strategy defines how products are customized in accordance with conditions that apply to specific countries (Bruton & Bruton, 2023). This strategy considers culture by providing a hierarchical management structure and placing location-specific control of facilities and products to local management that has a better understanding of local culture, practices, and customs. The more acclimated to a country’s customs a company can be the smoother and more accepted their products and business practices will be (Smith, 2023). Being able to pick and choose what cultural differences apply to business specifically is incredibly important. Transnational Strategy Transnational strategies combine standardization with multidomestic strategies because it meets in the middle of the least amount of customization needed and the least amount of local cultural requirements. An example given is car companies that produce and distribute international products, but produce a base model that can then be customized specifically to local laws, policies and preferences (Bruton & Bruton, 2023). Culturally this is important because each country will see differences in vehicles sold in different parts of the world, which creates an appreciation for the brand. Export Strategy Export strategy is the lowest in consideration of global integration and local responsiveness. The company makes a conscious choice to only cater to their local market without any customization for global distribution (Bruton & Bruton, 2023). This more often
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