Global Business Strategies for Responding to Cultural Differences
Clarke Ricks
School of Business, Liberty University
BUSI 690: Policy and Strategy in Global Competition
Dr. Hicks
April 8, 2021
Global Business Strategies for Responding to Cultural Differences
A major concern for managers deciding on a global business strategy is the tradeoff
between global integration and local responsiveness. is the degree to Global integration
which the company is able to use the same products and methods in other countries. Local
responsiveness is the degree to which the company must customize their products and
methods to meet conditions in other countries. The two dimensions result in four basic
global business strategies: export, standardization, multidomestic, and transnational. These
are shown in the figure below.
Export Strategy
An is used when a company is primarily focused on its domestic export strategy
operations. It does not intend to expand globally but does export some products to take
advantage of international opportunities. It does not attempt to customize its products for
international markets. It is not interested in either responding to unique conditions in other
countries or in creating an integrated global strategy.
Standardization Strategy
A is used when a company treats the whole world as one standardization strategy
market with little meaningful variation. The assumption is that one product can meet the
needs of people everywhere. Many business-to-business companies can use a
standardization strategy. Machines tools and equipment or information technologies are
universal and need little customization for local conditions. CEMEX, the Mexico-based
cement and building materials company, was able to expand globally using a standardization
strategy. Apple uses a standardization strategy because its products do not have to be
customized for local users. An iPod will look the same wherever you buy it. Domino’s Pizza
also uses a standardization strategy. Although toppings may vary to meet local tastes, the
basic recipes are the same and the store model of carryout or delivered pizza is the same
everywhere. A standardization strategy produces efficiencies by centralizing many common
activities, such as product design, gaining scale economies in manufacturing, simplifying the
supply chain, and reducing marketing costs.
Multidomestic Strategy
A customizes products or processes to the specific multidomestic strategy
