GEP: International & Multi-Domestic Strategies

EUS Business School (School of Knowledge Economy and Management) is a private establishment of higher education and research with the legal status of a non-profit association.

EUS was founded in 1989 as a result of the merger between the Ecole Supérieure de Commerce, Lille, and CERAM Business School, Sophia Antipolis. The Lille school had been founded in 1892 and CERAM in 1963.

EUS is a member of the Conférence des Grandes Ecoles. The school was approved by the French Ministry of Higher Education and Research, as an EESPIG (Private Establishment for Higher Education declared to be of public usefulness). This official status was conferred on 6 July 2015 and declared in the Bulletin Officiel on 23 July 2015. 

It is a community devoted to learning and the creation and transmission of management knowledge and practice. Since its inception, EUS has become a global school with a multi-campus structure and a large portfolio of programs taught in English and in French. These range from undergraduate level to continuing education and are aligned with the Bologna higher education norms (Bachelor, Master, Doctorate). 

International Strategy

EUS  aims to become the global business school on five continents. Its common international strategy is to train management leaders in the knowledge economy by developing : 

  • A school with one identity on its different sites, with campuses set up in the heart of scientific hubs. The school’s culture fosters an international outlook, excellence, and innovation.
  • Multi-site education programs offer mobility, professional expertise, and interdisciplinary programs (technology management).
  • Synergy with the school’s local environments both in terms of research and business partnerships. Cross-fertilization within science hubs (but also among these hubs) will give an overall view of innovation and the need for specific skills in the world’s different regions.
  • Systematic involvement of global companies with the school (governance, programs, incubators, research, students).
  • The school is managed according to the values of excellence, humanism, diversity, and innovation. 
  • EUS contributes to the local environment and economic fabric wherever its campuses are located.

<Johnny KIM’s GLOBAL EDU – PARTNER>’s International Strategy

Key features of the Multi-domestic Business Strategy 

An international strategy is a strategy through which the firm sells its goods or services outside its domestic market. International markets yield plenty of new opportunities for your business to grow. With an internationalization strategy your business could see:

  • Increase in market size and emergence of new markets
  • Greater ROI
  • Competitive advantage by location 
  • Global brand recognition
  • Global customer satisfaction

Business internationalization can have huge benefits, but that doesn’t mean it’s risk-free. You’ll have to consider some risks when adopting an internationalization strategy, including increased costs, barriers to trade, and a lack of sensitivity to local demand.

But let’s focus this article on all the great opportunities business internationalization can bring! 

Choosing the right strategy

Now, let’s take a look at the four international strategies and what they could mean for your business. Some strategies share similar aspects, but they each represent a unique approach to business internationalization. First up:

International Strategy

The international strategy is arguably the most common of the four. 

Often called an exporting strategy, it focuses on exporting products and services to foreign markets while maintaining production headquarters at home. This means companies avoid the need to invest in staff and facilities overseas. Business objectives are mainly towards the home market, but with some relating to the international market. 

There are some challenges that come with adopting the international strategy, such as initiating sales offices abroad, managing global logistics, and making sure that your company complies with foreign trade regulations.

Key features of the International Business Strategy 

  • Business objectives and competitive advantage relate primarily to the home market
  • Products are produced in the company’s home country and then sent to customers all over the world
  • Often referred to as an exporting strategy

This strategy is often followed by small local businesses that are seeking to export resources to foreign markets. 

Some good examples are wine

Multi-domestic Business Strategy

The multi-domestic business strategy invests in establishing a presence in a foreign market and tailoring its products to the local market. Companies adapt their products and offerings and reposition their marketing strategies to engage with a foreign audience. This includes taking into account foreign customs, traditions, and cultural traits. 

With a multi-domestic business strategy, company headquarters are often maintained in the country of origin. However, the company may establish localized headquarters overseas from which they can more easily manage relations with foreign customers.

Key features of the Multi-domestic Business Strategy 

  • Focus on establishing a presence and tailoring products to suit new markets
  • Competitive advantage is determined separately for each country
  • Multi-domestic strategies are largely used by food and beverage companies. 

Nestle is a great example of a country using a multi-domestic strategy. It takes a different marketing and sales approach in each of its markets and adapts its products to local tastes.

Global Business Strategy

When companies adopt a global business strategy they treat the world as one market and leverage economies of scale to boost reach and revenue. 

Global companies have little local variation, as products and services are homogenized to reduce costs while reaching as many people as possible. Usually, these companies have a central office or headquarters in their country of origin, while also establishing operations in foreign markets.

Although most aspects of the goods and services are homogenized, small changes might need to be made. For example, fast food companies like McDonald’s or Burger King might have to alter, add, or remove certain menus from their menus to suit the needs of local markets. Pharmaceutical companies are a great example of a global strategy in use.

Key features of the Global Business Strategy 

  • An integrated approach across different countries
  • Homogenized products to minimize costs and reach a broad audience
  • Small adjustments needed to break into international markets

Although global and international strategies sound similar, there’s actually a big difference! Where international strategy maintains a domestic policy and adapts it to international markets, the global strategy involves companies treating each foreign market differently and adapting their products or services to a foreign market.

Transnational Business Strategy

Now things get a bit more intricate. The transnational business strategy combines elements of global and multi-domestic strategies. This means that the business is still operating from its headquarters in its country of origin, however, it also allows the company to expand with full-scale operations in foreign markets. 

Transnational companies sell their products and services in multiple countries across the globe. The difference lies in how the product is marketed in each country. A transnational product is the same regardless of the country in which it is sold. It doesn’t change to suit a new market – the product is the same everywhere and isn’t modified to appeal to local customs or preferences.

The challenges of the transnational strategy include identifying effective management tactics and large investment costs.

Key features of the Transnational Business Strategy 

  • Combination of global and multi-domestic strategies
  • Allows the establishment of full-scale operations in foreign markets
  • Companies have separate marketing, research, and development departments to respond to local customers
  • Product or service is the same for different markets

A great example of a brand that has employed a transnational strategy is everyone’s favorite soft-drink Coca-Cola. Coca-Cola is the same everywhere, it has the same logo and marketing approach, the same taste and formula all over the world – the only thing that changes is the language on the packaging. 

Next steps in business internationalization

Now you know all about the four internationalization strategies, you might be wondering how to go about choosing one that’s right for you. 

You’ll need to think about your growth objectives and the resources you have on hand. If you have a deep understanding of these business internationalization strategies and are ready to put your analytical and management skills to work, then you’re ready to begin expanding your business. 

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