International Strategy Elizaveta Ogloblina Terese Persson Karoliina Rnjak Adrian Späthling

Introduction national boundaries are no longer constraints for companies many theories focus on four different approaches to the host countries

The Triad (Kenichi Ohmae 1985) Regional Trading blocks Europe (Germany) North America (USA) Asia (Japan) Global strategy has a regional, often triad-based feature

Reasons to go abroad saturated domestic market cheaper production research and development capacity reduction of seasonal effects diversification different competition abroad

Different Strategies International Strategy Multidomestic Strategy transfer of products and skills Multidomestic Strategy maximum local responsiveness Global strategy low cost strategy Transnational strategy cost pressures and responsibility pressures

Pressures for Local Responsiveness FOUR BASIC STRATEGIES High Transnational Strategy Global Strategy Cost Pressures International Strategy Multidomestic Strategy Low Low High Pressures for Local Responsiveness

International Strategy value creation by transfer of skills and products to foreign markets lack of local competitors with skills and products developed at home and introduced into foreign markets centralized management manufacturing abroad  duplication

Multidomestic Strategy response to different national needs cultural preferences legal / political infrastructural broad guidelines from headquarter most of the management is done locally  duplication bottom-up strategies

Global Strategy (1) Transferring distinctive competencies Realizing location economies -optimal location for each activity ->value creation is maximized or costs of value creation are minimized Moving down the experience curve -The longer a product is produced the more experience is gained and costs go down ->With consentrated production, duplication of the learning process is avoided

Global Strategy (2) cost reduction by standardization coordinated and economic use of resources top-down strategy convergence in buyer preferences in worldwide markets willingness to sacrifice preferences for cheaper products

Transnational Strategy local responsiveness and cost reduction focus on core competences with adjustments two-way communication same product with different features

Comparison Multi Global (Triade) best market response adapted product duplication just one law to follow Global (Triade) best cost advantages standardized product economies of scale several laws to follow

Case Study Procter&Gamble established 1837 household cleaning and hygiene products turnover 02/03: Austria € 176 Million Global € 35 Billion employees 02/03: Austria 76 Global 98 000

Case: Vizir Launch first heavy-duty liquid detergent should be seen by consumers as a main washing product with superior cleaning performances at lower temperatures easier and cheaper to produce than powder easy to copy by competitors

Problems to be launched in Germany or Europe marketing strategy one or different formulas danger of creating a product that is too expensive but perfect for everyone cheap but nobody likes it not competitive in any market

Possible Solutions launch in Europe right away, since it is easy to copy combine countries into geographic regions limited diversity for formula and marketing long-term: alliances with washing machines manufacturers clothing industry

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