INTERNATIONAL BUSINESS MANAGEMENT

A Multi-Domestic [Polycentric] Strategy VS. Global Marketing Strategy [Anon]



A Multi-Domestic [Polycentric] Strategy VS. Global Marketing Strategy [Anon]

Introduction

The last decade has witnessed an accelerated growth of large multinational enterprises ? many of which operate in 25 or more countries. In 1994 ? the top 25 MNEs had sales ranging from US$55 to US$175 billion a year. Increasingly ? these large MNEs have shifted sales and production operations to countries closer to their widespread global markets. A number of them now gamer more sales internationally than in their home country (e.g. IBM). The same often holds true of share of corporate profit. An important corollary to this location of sales and manufacturing operations outside the home country is the assignment of expatriates to key positions in international units. (Heskett 1986) In the early years ? almost all such movement was from the home country to the international subsidiaries or joint ventures. (Anon 1989)

Definition of Key Terms

Global Marketing Strategy: “Global strategy is based on a strategy implemtion on the assumption of 'one' global village, thus one strategy is implentated for all countries regardless of their socialcultural differences.”

Multidomestic Strategy: “Multidomestic strategy means companies implement a strategy that is more responding to local needs, values and demands. This usually happens on a regional basis, e.g. Western European countries or Northern part of Europe.”

MNE: Multinational Enterprise

Transnational Strategy:

“going beyond national boundaries or interests

comprising persons, sponsors, etc., of different nationalities

a company, organization, etc., representing two or more nationalities.

International Strategy: “International marketing is simply the application of marketing principles to more than one country.”

Discussion

The international staffing process is of considerable importance to an international enterprise. Virtually any type of international problem ? in the final analysis ? is either created by people or must be solved by people. Hence ? having the right people in the right place at the right time emerges as the key to a company's international growth. The staffing problems facing international enterprises are more complex than those in domestic enterprises ? and inappropriate staffing policies may lead to difficulties in managing international operations. The international literature indicates that expatriate failure is a persistent and recurring problem ? particularly for multinationals in the USA. Frequently ? the human and financial costs of failure in the international business arena are more severe than in domestic business. In particular ? indirect costs such as loss of market share and damage to international customer relationships may be considerable. The shortage of international managers is becoming an increasing problem for international enterprises. A survey of 440 executives in European enterprises claimed that a shortage of international managers was the single most important factor constraining corporate efforts to expand abroad. (Heskett1986)

International Strategies

MNEs use four basic strategies to enter and compete in the international environment: an international strategy ? a multidomestic strategy ? a global strategy and a transnational strategy. The appropriateness of each strategy varies according to the extent of pressures for cost reduction and local responsiveness. Following figure illustrates when each of these strategies is ...