Professional Documents
Culture Documents
multidomestic
industry?
In global industries, competitors compete in all markets and offer uniform (standardized)
products. In multi-domestic industries, firms compete in each national market
independently of other markets.
Companies such as GE, Apple, Sony and Gillette pursue a global strategy by competing
in all markets, providing the same product for each market, strong centralized control,
identifying customer needs and wants across international borders, and locating value
adding activities where they can achieve the lowest cost.
A global strategy is effective when differences between customers in countries are small
and competition is global.
A multi-domestic strategy involves producing products/services tailored to individual
countries. Following this strategy innovation comes from local R&D; managers
decentralize decision making; and encourage local sourcing. This strategy may result in
higher production costs because of tailored products and duplication of effort across
countries.
Four drivers determine which strategy is best for a specific company.
1) Market drivers like degree of homogeneity of customer needs, global distribution
networks, opportunities for shared marketing.
2) Cost drivers like potential for economies of scale, transportation cost, and product
development costs.
3) Government/political drivers like trade policies, compatible technical standards and
common marketing regulations, ownership rules.
4) Competitive drivers. The more that competitors and customers are following a global
market strategy the greater the tendency for a ll firms in industry to follow a
differentiated globalization strategy.
Multidomestic
Examples:
McDonalds
In 1955, McDonald's opened its first restaurant in Des Plaines, Illinois. Today, 2008, it
operates over 31,000 restaurants worldwide, in 119 countries, on six continents,
employing more than 1.5 million people all over the world. I consider McDonalds a
multidomestic company because they adjust to the cultures of their host countries. This
is most seen in their branch in India. Cows are held sacred in the Indian religion of
Hinduism which is why McDonalds India doesnt serve beef. Can you imagine? A
McDonalds restaurant without beef? Indian McDonalds burgers are purely vegetarian
and they serve several other products that are 100% beef free like several kinds of
wraps and pans. We see this aspect of McDonalds even here in the Philippines where
they serve rice burgers.
McDonalds
Im lovin it! Those famous golden arches are recognizable from miles away. This
leading global corporation stands out because of its brand management, global
presence, leadership in sustainable practices and consumer interaction.
Their glocal initiatives (global brand that caters to each market with their specific items)
is what makes McDonald's such a powerhouse chain.
Below are some examples of McDonalds tasty glocal marketing initiatives:
An
example
of
an
MNC
is
Adidas.
Global companies sell the same products or services in every market using the same
image and maintaining the characteristics that their companys products are popular of.
An example of a global company is McDonalds which has stores in most parts of the
world.
Summary:
1.A multinational corporation, or MNC, is a company which produces
goods and services and has offices in several other countries while a
global corporation or company is a company which also has trade
relations
with
several
other
countries.
2.MNCs usually pay local workers a lower salary rate than global
companies.
3.MNCs have official headquarters while global companies do not.
4.Global companies sell the same product with their characteristic
image while MNCs adapt their products to the needs of the host
countries.
Ethnocentric Orientation:
Regiocentric Approach
In this approach segmentation of the markets is fulfilled on the basis of similarities in terms of
regions. A company finds economic, cultural or political similarities among regions in order to cover
the similar needs of potential consumers. For example, countries of former USSR can form one
group as needs and tastes of consumers of these countries are very similar as they were
representatives of one nation not so long ago. The same products and strategies can be used in
such set of countries like Denmark, Norway, Finland and Sweden or Pakistan, Bangladesh and India
as they possess a strong regional identity and belong to the same cultural dimensions. Pepsi and
Coca-Cola are examples of international companies which are successfully using this international
marketing orientation.
Geocentric Approach
This orientation favours neither home country nor foreign countries where the company operates. It
is also called a global approach the main idea of which is to target global consumers who have
similar tastes. The main idea of this orientation is to borrow from every country what is best. The
limitation is that it fully depends on constant global market research, which requires a lot of
investment and time. This approach is for companies with an impressive capital that want to
become world leaders... , in this quest ...manufacturers offer homogeneous, identifiable and often
interchangeable services and products in order to integrate them for worldwide operational
efficiency (Paul, 2008). The European Silicon Structures is a pure example of geocentric
international marketing orientation: the company is incorporated in Luxembourg, its headquarter was
established in Munich, research facilities are in England, and France has its factory; the company
went even further by assigning its eight directors from seven different countries.
Why go Global?
Ethnocentric Orientation
Assumes home country is superior to the rest of the world; associated with
attitudes of national arrogance and supremacy
Polycentric Orientation
Management operates under the assumption that every country is different; the
company develops country-specific strategies
Opposite of ethnocentrism
Regiocentric Orientation
NAFTA
Geocentric Orientation
Acculturation:
Some examples of acculturation:
1) A first generation Italian who lives in an Italian enclave in the United States may
continue to speak just Italian and to follow the norms and mores of his Italian origins.
This person will not have become highly acculturated to American culture.
2) The granddaughter of a Chinese immigrant has gone to American schools and
will now attend an American college. She spends time primarily with her American
friends, dresses as they do and shares their values and interests. She has become
highly acculturated into American culture.
Iceberg Analogy:
1) Above the surface, certain characteristics are visible, but below, unseen to the
observer, is a massive base of assumptions, attitudes and values that strongly
influence decision-making, relationships, conflict and other traits of international
business.
2) 3 layers: High culture, folk culture and deep culture.
union
A union is an organized group of workers who collectively use their strength to have
a voice in their workplace. Through a union, workers have a right to impact wages,
work hours, benefits, workplace health and safety, job training and other workrelated issues.
How do people form a union?
When workers decide to come together to improve their jobs, they work with a union.
Once a majority of workers shows they want a union, sometimes employers honor the
workers choice. If the workers win union representation, they negotiate a contract with
the employer that spells out each partys rights and responsibilities in the workplace.