Section TwoMultinational, Global, and Transnational Strategies
International strategies may be described as multinational,
global, transnational, or mixtures of basic strategies. With a
multinational strategy, companies operate in countries chosen
for their individual profit potential. All activities related to
design, production, and marketing are then performed in each
of these countries. (These are called value-chain activities.)
Multidomestic strategies customize the product and its
marketing to the unique preferences of each country. In con-
trast, global strategies produce standardized products, with
different activities such as design and production being located
in different countries, depending on labor costs, skills, or other
strategic advantages. With transnational strategies, companies
compete in the global marketplace through the use of networks
and strategic alliances.^39
Multinational or multidomestic strategies provide a power
advantage in dealing with unionized workers, because labor
difficulties or other production problems only shut down
production and revenue flows from one country’s operations or
a small set of countries. However, they do not produce the
economies of scale of global strategies. With global strategies,
economies of scale are obtained by maintaining only a few
different product models. As a result, lower costs and higher
quality are obtained. Japanese automobile manufacturers