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0:00
Hello and welcome to this series
of introductory talks
on business strategy.
My name is Robert Grant.
I'm a professor of
strategic management,
at Bocconi University
in Milan, Italy.
I'm also the author of
'Contemporary Strategy Analysis',
a leading strategic
management textbook
used in business programmes
throughout the world.
0:22
What about when a firm
has internationalised?
That is when it is a
multinational corporation.
How does it determine its
international strategy?
There are two basic
choices here.
A multi-domestic strategy
or a global strategy.
A multi-domestic
strategy is when a firm
views the world as a set of
separate national markets
and establishes national
subsidiaries with a high
degree of autonomy in
serving each market.
A global strategy involves viewing
the world as a single market.
A classic global strategy
would have been that that
many Japanese companies undertook
during the 1960s and 1970s.
For example, Honda produced all
its motorcycles within Japan
and then exported them to
the rest of the world.
However, most multinational
corporations have moved
to what I refer to as
Global strategy 2.0.
This involves reconciling global scale
economies with national differentiation.
1:26
How the reconciliation between
global scale economies
and national
differentiation takes place
depends upon the characteristics
of the industry.
In some industries, the
benefits of global integration
as a result of very massive
levels of scale economy,
and conversely, there are few
benefits of national differentiation.
In industries such as jet
engines and semiconductors,
a very global approach
will be followed.
Conversely, in some
other industries,
there may be very few benefits
of global integration.
Whereas, there may
be substantial need
to nationally differentiate
the offerings.
In some of these industries,
we may see that
there are in fact
very few multinational
corporations,
as is the case of
funeral services.
