International Strategy of Audi Assignment Example | Topics and Well Written Essays - 4500 words

International Strategy of Audi - Assignment Example Globalization has provided avenues for growth the world over. Unlike earlier times when the local companies/ manufacturers were favored over ‘outsiders’, globalization has made this practice redundant in almost all major economies, as far as legal provisions are concerned. Therefore companies are quick to respond to the situation. Now the moot question is ‘which strategy to opt for, while entering the International arena. In general the strategies could be categorized as; 1. A multi domestic strategy 2. A global or international strategy 3. A transnational strategy A multi domestic strategy enables individual subsidiaries of a multinational firm to compete independently in different domestic markets. The multinational headquarters coordinates financial controls and major marketing policies, and may centralize some R&D and component production. Otherwise subsidiary behaves like a strategic business unit that is expected to contribute earnings and growth proportionate to the market opportunity. In this strategy, resources are dispersed throughout the various countries where the firm is doing the business, decision-making authority is pushed down to the local level, and each business unit is allowed to customize products and market offerings to specific needs. The corporation as a whole foregoes the benefits that could be derived from centralization and coordination of diverse activities. Global strategy seeks competitive advantage with strategic moves that are highly interdependent across countries. This strategy involves a high degree of concentration of resources and capabilities in the central office and centralization of authority in order to exploit potential scale and learning economies. These moves include most or all of the following: A standardized core product that exploits or creates homogenous tastes or performance requirements, Significant participation in all major country markets to build volume, A concentration of value-creating activities such as R&D and manufacturing in a few countries, and A coherent competitive strategy that pits the worldwide capabilities of the business against the competition. In transnational strategy a company often enters into strategic alliances with their customers, suppliers, and other business partners to save time and capital. Such alliances when they become long-term partnerships may bring to the firm specialized competencies, relatively stable and sophisticated market outlets that help in honing its products and services, or stable and flexible supply sources. In such a strategy, nearly all value-adding activities are managed from a global perspective without reference to national borders. This results in a virtual corporation, consisting of several independent firms that collaborate to bring products or services to