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What Are The Advantages Associated With The Use Of International Division Strategies

Decent Essays

Q1. Identify the four basic strategies that MNCs use and the situations in which they are used. The four basic strategies used by MNC’s are international strategy, multi-domestic strategy, global strategy, and transnational strategy. Global strategy is an integrated strategy based primarily on price competition, therefore it is most commonly applied in situations where the need for integration is high and awareness of differentiation is low. Multi-domestic Strategy is differentiated strategy emphasizing local adaptation. Multi-Domestic Strategy is the opposite of Global Strategy, it is typically implemented when the need for differentiation is high but the concern for integration is low. International Strategy is a mixed strategy combining low demand for integration and responsiveness, it incorporates those cases in which both the need for integration and awareness of differentiation are low. Transnational Strategy is the integrated strategy emphasizing both global integration and local responsiveness. The need for integration and differentiation are both high. There is a strong need for integration in production along with higher requirements for regional differentiation in marketing. Q2. “Companies still in the developmental stages of international business involvement are most likely to adopt the international division structure." Why? There are a number of advantages associated with the use of an international division structure. Due to international operations

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