Which is frequently dangerous for multinational businesses

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Assignment:

Introduction

Businesses worldwide use a crucial international business plan to grow abroad. It is a tactical plan that covers vital information about transnational business activities (Usmani, 2022). There are four international business strategies: International, Multi-Domestic, Global, and Transnational.

Below we will discuss the advantages and disadvantages of each strategy.

International Strategy

Any business looking to grow internationally must have a fundamental international business strategy. It concentrates on a single point of activity, such as exporting goods and services to various nations or buying goods and services from other countries (Usmani, 2022).

Advantage:

Create a consistent, instantly recognizable brand.
Reduce costs and integrate management processes.

Disadvantage:

Every time a corporation exports, there are more taxes and tariffs.
Coordination of supply chains and customer service is complex, with only domestic offices.

Multi-Domestic Strategy

A multi-domestic approach is dynamic because it aims to increase local consumer responsiveness to the brand through product localization and customization (Usmani, 2022).

Advantage:

Increase in market share in a local market more quickly.
Easy access to regional competitive benefits, including labor, shipping routes, and natural resources.

Disadvantage:

It could be costly to conduct marketing campaigns, market research, and design strategies.

Global Strategy

A global strategy enables businesses to have the most significant degree of global integration through a course of action focusing on entering international markets (Usmani, 2022).

Advantage:

Utilize economies of scale by using effective operations and processes.
Simplify product development with a single product line and few market-specific adjustments.

Disadvantage:

This approach necessitates an initial strong global presence, which is frequently dangerous for multinational businesses.

Transnational Strategy

Both global and multi-domestic business traits can be found in a transnational company. Its goal is to achieve a high level of local responsiveness while maximizing global integration's advantages. These companies have a central office in their native country and subsidiaries in other countries (De Bruin, 2017).

Advantage:

Establish a standardized brand that is easily recognizable while considering variations in market preferences.
Utilize economies of scale to centralize and streamline operations.

Disadvantage:

It can be challenging to centralize all locations spread out over the world with international activities.

References:

De Bruin, L. (2017, January 27). International Business Strategy Explained with Examples | B2U. B2U - Business-To-You.com.

Smartling. (2022). The 4 Most Common International Business Strategies (+ Pros and Cons) | Smartling.

Usmani, F. (2022, April 16). International Business Strategy: Explanation and Examples - Parsadi. Parsadi.

This is a discussion forum and I need answer as a argument with references.

Reference no: EM133487561

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