Concentration of resources towards production Little or no financial commitment as the clients' exports usually covers most expenses associated with international sales.
Share on Facebook Companies operating in the international arena fall into one of four general classifications.
International companies engage in importing and exporting exclusively. Global companies standardize product or service offerings, production and marketing worldwide under centralized management to reduce costs. Transnational and multinational companies fall between international and global companies.
Ambiguous Distinctions Because of similar operating characteristics, transnational and multinational firms sometimes are labeled as being the same. While they are similar in many respects, they differ in others.
Both transnational and multinational companies headquarter their management in one country, called the home country, and operate in many other countries, called host countries. Both usually have local production and service facilities that often have a significant influence on employment, household incomes and standards of living.
They mainly differ in the degree of autonomy host country managers have in running their local operations. However, the concept of local autonomy is not readily observed, nor easily defined, by casual observers. Culturally Relevant Multinational companies tailor their offerings and marketing strategies specifically to the customs and preferences of host countries.
Although local managers may operate within financial parameters established by headquarter management, they have considerable, if not complete, autonomy in developing product or service offerings expressly for their host countries. The same autonomy applies to developing and executing marketing and communication strategies, which generally reflect the cultural idiosyncrasies of host countries.
McDonald's often is cited as an example of a multinational company; many of its products have global appeal, but the company also has offerings unique to local markets, such as vegetarian burgers in India and rice burgers in the Philippines.
Standardized and Localized Transnational companies are compromises between global companies that standardize offerings and marketing in all markets and multinational companies that cede autonomy for offerings and marketing to local managers. Often called "glocal" companies for thinking globally and acting locally, they centralize some strategic decisions to cut costs while remaining responsive to cultural distinctions.
There is not a unified template that governs how companies split decision-making authority and responsibility between headquarters and local managers. Companies tend to use whatever works for their needs; however, sensitivity to local market cultures forms the basis for the transnational operating model, which gives local managers autonomy for marketing communications in host countries.
McDonald's also is cited frequently as a transnational company because many of its offshore operations are owned locally by host-country franchisees that are independent businesspeople. Aligning Communications with Cultures Local managers in both operating models typically take responsibility for marketing communications to ensure that message content aligns with local cultures and languages.
Local managers in the multinational model may have more autonomy in shaping message content, as some local managers in the transnational model may have authority only to align a universal global message with the local language.
Both models, however, are particularly keen about assimilating into the cultural fabric of host countries through marketing activities. In contrast, global companies need not rely on cultural preferences and language nuances to drive demand.
Their products and services typically have universal appeal that transcends national boundaries. Computers and smartphones are examples of products having global appeal.These are domestic exporter, multinational, franchiser, and transnational.
Each of these strategies is pursued with a specific business organizational structure (see Table ). For simplicity’s sake, we describe three kinds of organizational structure or governance: centralized (in the home country), decentralized (to local foreign units.
There are four ways of organizing business internationally: domestic exporter, multinational, franchiser, and transnational. Which strategy concentrates financial management and control out of a central home base while decentralizing production, sales, and marketing operations to units in other countries?
Transnational and multinational companies fall between international and global companies. Ambiguous Distinctions Because of similar operating characteristics, transnational and multinational firms sometimes are labeled as being the same.
domestic exporter, multinational, franchiser, and transnational. how do IS help businesses compete using quality design? IS can enhance quality by simplifying a produt or service, facilitating benchmarking, reducing product development cycle time, and increasing quality and precision in design and production.
In terms of global business strategy and structure, a multinational company will use a policy of centralized production, accounting, marketing, human resources, with strategic management.
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