Sunday, November 28, 2010

International strategy for MNEs

Home replication
Advantage- leverages home-country-based advantages.  Relatively easy to implement
Disadvantage- lack of local responsiveness.  May alienate foreign customers.
Localization
Advantage- maximizes local responsiveness. 
Disadvantage- high costs due to duplication of efforts in multiple countries.  Too much local autonomy.
Global standardization
Advantage- leverages low cost advantages
Disadvantage- Lack of local responsiveness.  Too much centralized control
Transnational
Advantages- cost-efficient while being locally responsive.  Engages in global learning and diffusion of innovations
Disadvantage- organizationally complex.  Difficult to implement

Four organizational structures
·         International division
·         Geographic area
·         Global product division
·         Global matrix

Tom and jerry Example article