Multinational Companies Will Have Different Strategies Depending on Country

Multinational companies will have different strategies depending on country

differences in buyer tastes, market sizes, and growth potential, cost advantages with respect to wage rates, worker productivity, inflation rates, energy costs, tax rates, and other factors, changes in currency exchange and the extent to which a country’s political, economical, socio-cultural, and technological (PEST) factors affect the business environment. The three main strategies utilized are a “think local, act local” or multi-domestic, a “think global, act global” or transnational, or a “think global, act local” or global strategy. A company should employ a “think local, act local” strategy when the consumer preferences for a product vary greatly between countries. A “think global, act global” strategy should be utilized when consumer preferences for a product are very similar. Lastly, a “think global, act local” strategy should be employed when consumer preferences are similar for a product but aspects of the product need to be customized to fit local market preferences.

Therefore, if a company’s product is mobile phones, it would make more strategic sense to employ a transnational strategy. This is because consumers globally usually have the same preferences or use when it comes to mobile phones. They usually look for a phone with a long battery life, camera and video camera capabilities, ability to connect to the internet, text and calling functions. Of course the company can segment by what they specifically want but generally their needs may not vary that much.

If a company’s product is dry soup mixes and canned soups, it would make more sense to use a multi-domestic strategy. When it comes to food, different countries often have different preferences. Not only may the flavors people like differ, but the way in which people want the product to be packaged may differ as well. For example, consumers