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Journal of International Business Studies , 35 5 : — Zoom in, zoom out: Geographic scale and multinational activity. Journal of International Business Studies , 49 8 : — Heinz adapts its products to match local preferences. Because some Indians will not eat garlic and onion, for example, Heinz offers them a version of its signature ketchup that does not include these two ingredients. A firm using a global strategy sacrifices responsiveness to local requirements within each of its markets in favor of emphasizing efficiency.
This strategy is the complete opposite of a multidomestic strategy. Some minor modifications to products and services may be made in various markets, but a global strategy stresses the need to gain economies of scale by offering essentially the same products or services in each market.
Microsoft, for example, offers the same software programs around the world but adjusts the programs to match local languages. For such firms, variance in local preferences is not very important. A firm using a transnational strategy seeks a middle ground between a multidomestic strategy and a global strategy. Such a firm tries to balance the desire for efficiency with the need to adjust to local preferences within various countries.
These firms make some concessions to local tastes too. Stock report on Walmart. One of the most obvious benefits is that the company removes a competitor from the marketplace, even if the two were not directly competing at that point in time. If the company did not previously have a presence in the country or region where the newly purchased company operates, the international company expands its sphere of influence as well.
The international company also stands to learn from the business practices of the newly purchased company, including how to best conduct business in the cultures of certain parts of the world. By Steven Symes. Insourcing Insourcing takes place when a multinational company moves a certain business practice or set of practices to another country.
Benefits of Insourcing Insourcing provides a variety of benefits, depending on the company, business practices and where the company locates the business practices. Other companies adapt their products to suit local demand, tastes and customer requirements. What Are Vertical Sales? Share on Facebook. Vertical Expansion - Manufacturing Vertical expansion occurs when multinational companies expand production processes to other countries. Vertical Expansion - Sales Multinational companies also might expand by setting up sales units in host countries instead of marketing their products through local agencies.
Horizontal Expansion - Production Often, multinational companies set up production units in other countries for the sole purpose of catering to the local market. Horizontal Expansion - Sales When offering products in the host countries, multinational companies may present their goods and services just as they are offered in their home countries.
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