Hello,
I need four responses of at least 150 words each for the below students discussions for this week. Also in the bold below are the questions the students at answering.
In your reading this week, you cover an article on business strategy and international culture. What are the four strategies discussed and how does international culture play a part in each of the different models presented? In 300 words, support your position.
Student one:
Hello Class
I once heard someone say it does not matter how bad the economy is, a businessman will always find a way to make a profit. I did not understand this statement then, but I do now. A major aspect of business is strategy. There are Internal and external strategies always being used to create the business outcome desired by business owners and stakeholders. Some organization will even develop domestic and global strategies.
In the article in question they discussed four strategies that can be found on a spectrum of low and high global integration and low or high local response. The strategies include export strategy, standardization strategy, transnational strategy and multidomestic strategy (2012).
The Export Strategy is used when a company simply offers its goods and services internationally as is. This strategy has low global integration and low local responsiveness. With this strategy international culture does not play any part. Since the products and service are not customized to suit the needs or wants of another country.
The Standardization strategy is when an organization treats the world like a homogenous market. The standardize strategy offers several advantages which include economies of scale, transfer of experience, uniformed global image and easier control (Haron, 2016). With this strategy there is high global integration and low local responsiveness. Each market is treated the same. International culture has no influence on this strategy. How the product has a high level of universal acceptance. For instance, an I-phone or other high-level technology can be marketed around the world and is accepted.
Transnational strategy is a combination of standardized strategy and multidomestic strategy. With this strategy there can be a centralized corporate office in addition to local offices in each country. With transnational strategy there is high global integration and high local responsiveness. The company is constantly interpreting and making changes to reflect local culture. Therefore, culture plays an important part in Transnational strategy since it would be used to customize products continuously.
Multidomestic strategy is highly influenced by culture since products and service are created solely to suit local markets. A multidomestic strategy focuses on responding to the competition found in each country. With the multidomestic strategy there is low global integration and high local responsiveness. Restaurant chains usually pursue a Multidomestic strategy.
Reference
Haron A J (2016) Standardized Versus Localized Strategy: The Role of Cultural Patterns in Society on Consumption and Market Research. J Account Mark 5:151. doi:10.4172/2168-9601.1000151
(2012). Principles of Management. Retrieved from https://courses.lumenlearning.com/wm- principlesofmanagement/chapter/responding-to-cultural-differences/
Student two:
There are four different strategies that are discussed in the article in this weeks readings. These different strategies vary between global integration and local responsiveness. Local responsiveness describes customizing items for the countries in which they are sold whereas global integration is the amount to which a company can use the same product within different countries.
Export strategy represents low global integration as well as low local responsiveness. As these are each low, this strategy is adopted by businesses who operate primarily domestically. They could take advantage of certain opportunities to export, however they do not customize their products to do so.
Standardization strategy is high global integration and low local responsiveness. These companies do a lot of export sales but do not customize their product for different countries. A great example of this is Apple, as they do not customize their products but sell worldwide. Apple products look and function the same everywhere in the world.
Multidomestic strategy customizes nearly all products that are sent to different countries. This means they are low global strategy and high local responsiveness. The first example that comes to mind with this one is McDonalds. McDonalds sells many different kinds of foods at their restaurants depending on where the store is located. Are you in the mood for a Nutella burger? Head to Italy to grab a bite! How about a squid burger topped with mashed potatoes? Hong Kong is waiting.
Transnational strategies are high global integration and high local responsiveness. They do their best to keep a common element of their product but also allow room to add on parts specific to the country of use.
International culture can play a part in each of these. If the product works there, it will sell, if not, the company needs to adapt and find out what will make it sell. Things like food are a great example of this.
Resources:
Bruton, J. (n.d.). Global Business Strategies for Responding to Cultural Differences. Lumen Learning.
Kennedy, M. (n.d.). See What McDonalds Food Looks Like In 17 Countries All Over the World. Retrieved from https://twentytwowords.com/see-what-mcdonalds-food-looks-like-in-17-countries-all-over-the-world/.
Student three:
As most people will tell you, its important to stay educated on the various cultures that exist in this world. Especially, if you intend to make your business a global success. The 4 strategies covered in this reading include: Standardization, Transnational, Export, and Multi-domestic strategy.
Export Strategy- This particular strategy is used when a company wants to focus on domestic operations. Just like the name implies, this strategy does not have the intention of going global, but rather exporting more products in order to take advantage of the opportunities one has internationally.
Standardization Strategy- When a company wishes to see the whole world as their oyster and attempt to generalize the world in a way that finds only minor differences between countries, this strategy is used. Under the guide of this strategy, companies operate under the assumption that they can please everyone they service. Its an attempt at being universal; fulfilling the needs of every consumer from different countries with very little difference in the conditions. Overall, this strategy works by finding commonalities between various products and using it your advantage in order to maximize your output in an efficient manner.
Multi-domestic Strategy- This strategy goes the other direction from the previous one, being very specific with the details of the products as taking the conditions of that particular country into account. 7-eleven is used as an example for this strategy as it narrows down the product selection, payment methods and manufacturing methods tailored to that country. In Japan, one could pay off their utility bill at a 7-eleven. Anyway, its safe to say that companies reap the benefits of using this strategy as country managers are aware of the laws, customs, and preferences of the country they are in.
Transnational Strategy- This final strategy combines the two previously mentioned strategies. The reason for this strategy comes from outside cost pressure from other international competitors as well as needing to satisfy the needs of their local customers. This is the trickiest strategy to maintain as a company must find a balance between economics and the current condition of the country they are servicing. According t the reading, Ford uses this strategy to accomplish multiple goals including custom choices for consumers, proper marketing for that specific country and selling one of a kind products that satisfy consumer demands.
Reference- Globalization and Business
Student four:
There are four basic organizational structures, that include the functional, divisional, hybrid, and matrix structures. According to the readings, a functional structure is good for having either having a specific product line or grouped product variety. However, due to the nature of a functional structure, it does not hold well when markets need to be restructured to incorporate change. Divisional structures are more complex than functional structures because it serves specific markets and regions. Due to the specificity of various regions and markets, in divisional structures, the products that are produced are of high quality. In turn in divisional structures, there is also a higher cost because each division of the market has its own requirements. Using a combination of organizational structures does occur and they are called hybrid structures. The matrix structure allows for the use of many organizational structures. International culture plays a big role in each of the four organizational structures of businesses. For example, in a multi-domestic strategy, the products that a company manufactures are customized for that specific region. Customizing products for a given market is what makes money and is successful. The transnational strategy incorporates not only the local market but also international demands. The four organizational structures incorporate multi-domestic and transnational strategies, for their specific business plans. Doing business globally will require more than just cultural awareness. Businesses like Apple, for example, have their iPhone parts in various countries. Making all of the iPhones in the U.S would be massively expensive, according to Apple it would cost approximately 4.2 billion to manufacture in the U.S. It is no wonder that Apple chooses to manufacture in China, Europe, Singapore, Malaysia, Thailand, and the Philippines. In fact, according to the readings, 85% of iPhone parts are manufactured in China. By having different types of organizational structures, companies can pick and choose what works best for them. However, without having cultural knowledge of how to incorporate culture into a business organization, there would be little success.
References:
Global Business Strategies for Responding to Cultural Differences. Authored by: John/Lynn Bruton and Lumen Learning. License: CC BY: Attribution
Duhigg, C. (2012) How the US Lost Out on iPhone Work, The New York Times, 21 January [Onlin]. Available at http://www.nytimes.com/2012/01/22/business/apple-a
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