Using the Global Integration – Local Responsiveness Framework

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Introduction

According to D. Siluh (2011) multi-domestic strategy can be defined as a strategy where companies try to achieve maximum local responsiveness by modifying both the product they offer and the marketing strategy they use to match different national conditions. Or product markets that initially serves local customers preferences and the functional requirements therein may differ from other markets.

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Some products such as food and beverages, clothing and lifestyle products are some of the appropriate examples of multi-domestic markets which may vary considerably across different countries where consumers prefer to have the local variants. Examples of multi Domestic Corporation are; Philips Company, Coca-Cola company, McDonald’s and KFC. This concept primarily focuses on how to maximize effectiveness and efficiency in a company by exploiting economies of scale, experience and marketing skill, production and logistics. Any company taking this strategy assumes that foreign market opportunities are of the same importance as of the home market opportunities. For a company to succeed in adapting to meet market needs, it’s important to maintain competitive leverage in local markets. So the company adopts and follows differentiated marketing strategy with different marketing mixes in different markets in the world.

Companies employing this marketing strategy will definitely need to understand the various local market cultures and emphasize their entry into those markets based on demographics of that area. For a domestic strategy to be successful, it is very vital of them to greatly invest in research of the various localities where the products are actively marketed. Multi domestic strategy is mainly used to create a wide range of tactics that are used to adapt and fit into markets that share a lot of similarities while customizing the marketing and advertising efforts to perfectly match with the local market.

There are three major strategic approaches of multinational enterprises. They include; (1) the global strategy. (2) The multinational (or multi-domestic) strategy and (3) the transnational strategy. In our case we will largely look on the multi-domestic strategy. A good example of a company that has followed the multi-domestic strategy is Philips Company. The company used this strategy to promote innovation from the local research and development process, building strong entrepreneurial spirit, tailoring products to individual countries and maintaining high quality through backward integration. However the Philips Company also faced some challenges when implementing the multi-domestic strategy which includes; high cost of tailored products, growing fear of product duplication by other companies across countries, the market was running slow and product innovations which was more research based than market driven.

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