Extension strategies are employed by companies in the international, global, and transnational stages of development. The critical difference is one of execution and mind-set. In an international company, for example, the extension strategy reflects an ethnocentric orientation and the assumption that all markets are alike. A global company such as Gillette does not fall victim to such assumptions; the company’s geocentric orientation allows it to thoroughly understand its markets and consciously take advantage of similarities in world markets. Likewise, a multinational company utilizes the adaptation strategy because of its polycentric orientation and the assumption that all markets are different. By contrast, the geocentric orientation of managers and executives in a global company has sensitized them to actual, rather than assumed, differences between markets.
Strategy 1: Common for B2B
Strategy 2: Low-cost because the product is unchanged, communication is adapted
Strategy 3: Cadillac wanted to sell 20,000 autos outside the U.S. by 2010; will adapt to local market requirements
Strategy 4: Combines local market conditions recognized in Strategies 2 and 3