[Capstone] Consider a firm that began with an international strategy but is now losing market share to lower-cost global competitors while also facing demands for local product customization. What strategic evolution is MOST appropriate?

Question

BlackTom AI · Accepted Answer

A transnational strategy balances global efficiency with local responsiveness, which directly addresses simultaneous pressures from low-cost global competitors and local customization demands.

1) Relevant knowledge points and concepts
- International strategy: leverages home-based competencies with limited local adaptation; vulnerable to cost competition and local needs.
- Global standardization: emphasizes global efficiencies and scale to minimize costs, but sacrifices local responsiveness.
- Localization (multidomestic): emphasizes local adaptation and responsiveness, but increases costs and reduces scale economies.
- Transnational strategy: integrates global coordination (cost reduction, scale, knowledge sharing) with decentralized local responsiveness (customization, market-specific adaptation).

2) Step-by-step reasoning
- The firm started with an international strategy and is losing share to lower-cost global rivals. That signals a need for greater cost efficiency and global scale or coordination.
- Simultaneously, customers demand local product customization, which requires decentralized decision-making and local responsiveness.
- A global-standardization shift would improve costs but fail to meet customization demands. A localization shift would meet customization but worsen cost disadvantage.
- Therefore, neither pure cost-focus nor pure localization alone solves both pressures. A transnational approach is designed precisely for trade-offs: centralized activities capture efficiencies (e.g., shared R&D, procurement) while local units adapt products and implement market-specific tactics.

3) Intermediate considerations (no numeric calculations needed)
- Implement knowledge-sharing systems, modular product platforms, and global sourcing to cut costs.
- Empower regional teams to tailor offerings and marketing to local preferences.

4) Why the correct answer is correct
- The transnational strategy simultaneously targets cost reduction through global integration and responsiveness through local adaptation, matching the firm’s dual problems.

5) Why other options are incorrect
- Global standardization: reduces costs but neglects customization needs.
- Maintain international strategy: insufficient change; continues vulnerabilities.
- Localization: improves responsiveness but increases costs and worsens competition with low-cost global rivals.

Conclusion: The most appropriate strategic evolution is to shift to a transnational strategy to simultaneously address cost AND responsiveness pressures, matching the provided correct answer.

[Capstone] Consider a firm that began with an international strategy but is now losing market share to lower-cost global competitors while also facing demands for local product customization. What strategic evolution is MOST appropriate?单项选择题

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