Question

1. How would you go about developing a business strategy for your company?
2. Should a company rely on strategy that is the same in every country, or should it adapt its strategy to local conditions in every country? What are pros and cons of each approach?
3. When is Multinational strategy likely to be better than Global strategy (what types of products/consumers)?
4. Should companies that sell products/services worldwide manage their operations and productions centrally, or should they have autonomous regional offices/production facilities? When may one work better than the other?

Answer 1

How would you go about developing a business strategy for your company?

A business strategy focuses on generating revenue and growth for the short term future for the company. This is more of a tactical approach and can be varied from one place to another. In order to create the business strategy I would perform an internal analysis of the firm followed by external analysis. Post this find out the opportunities and implement resources to leverage the opportunities. However, this will need to be done multiple times based on various external factors such as product type, geographic location, etc.

Should a company rely on strategy that is the same in every country, or should it adapt its strategy to local conditions in every country? What are pros and cons of each approach?

A company should adapt its strategy to local conditions. This is mostly true for most companies. Unless a product is commoditized across the world, the company needs focus on localizing their efforts.

The benefit of localization is that the business strategies can generate optimum result if they are correctly implemented. Localization also helps in creating a strong brand and provides rapid growth for the company. The drawback of localization is that it requires varied level of expertise and wide scale operation. As a result, it requires more effort, time, and manpower.

The benefit of a standardized strategy is that it is comparatively simple and can be readily implemented once it has been tested in a market. It is also cost effective and can be done with comparatively less resource. The drawback of standardized strategy is that it is not optimum and at certain locations it can be a complete failure. The risk of failure is higher with a standardized approach.