MGMT+650+-+Final+Exam+Question+6

Answer provided by Frank
Transnational/International more competitive // ** If most of a company’s competitive advantages come from upstream in the value chain-as for example, low-cost or high-quality design, engineering, or manufacturing (as with Toyota example)-a company can often generalize these advantages worldwide. A transnational strategy or an international strategy becomes the likely choice. Multi-domestic more competitive // ** If a firm generates most of its value downstream-in marketing, sales, and service-then it is well positioned to engage in a multi-domestic strategy, which serves each market individually.
 * // Discuss the conditions when a transnational or international firm is likely to out-compete a multi-domestic or regional strategist. Contrast this with the opposite situation where the multi-domestic is most likely to be successful. // **


 * // This answer found in Chapter 6 on pages 268 and 269 of text // **


 * __Heidi's Response__**

Discuss the conditions when a **transnational** or **international** firm is likely to out-compete a **Multidomestic** or **regional** strategist. __ Transnational strategy __ – gives two goals top priority: seek location advantages and gaining economic efficiencies from operating worldwide. · Local advantage means that the transnational co. disperses or locates its value-chain activities (e.g., manufacturing, R&D, and sales) anywhere in the world where the company can do it best or cheapest. · Low cost advantage, top quality __ International strategies __ – sell global products and use similar marketing techniques worldwide. · They choose not to locate their value-chain activities anywhere in the world. Upstream (R&D, manufacturing, production, finance) and support activities remain concentrated at home country headquarters. They believe that concentrated R&D / manufacturing will bring greater economies of scale and quality. (Down-stream) sales and production may be established in foreign locations. __ Multidomestic strategy __ – gives top priority to local responsiveness. The Multidomestic strategy is in many respects a form of differentiation strategy. The company attempts to offer products or services that attract customers by closely satisfying their cultural needs and expectations. (Advertisements, packaging, sales outlets, and pricing are adapted to local standards). · Usually costs more to produce and sell unique products, therefore they charge higher prices. __ Regional strategy __ – attempts to attain some of the economic efficiency and location advantages of the more global transnational and international strategies combined with some of the local adaptation advantages of the Multidomestic strategy. · Manage raw-material sourcing, production, marketing, and support activities within a particular region. · This strategy not only allows cost savings similar to those of the transnational and international strategists but also gives the firm flexibility for regional responsiveness. · Similar products offered throughout a major economic region.
 * Contrast** this with the opposite situation where the multidomestic is the most likely to be successful.