There are four basic strategies to compete in the international environment:
global standardization
localization
transnational
International
The global standardization strategy focuses on increasing profitability and profit growth by reaping the cost reductions that come from economies of scale, learning effects, and location economies.
The strategic goal is to pursue a low-cost strategy on a global scale.
The global standardization strategy makes sense when:
There are strong pressures for cost reductions
Demands for local responsiveness are minimal
The global matrix structure is an attempt to minimize the limitations of the worldwide area structure and the worldwide product divisional structure.
The global matrix structure:
Allows for differentiation along two dimensions - product division and geographic area
Has dual decision--making - product division and geographic area have equal responsibility for operating decisions
Can be bureaucratic and slow
Can result in conflict between areas and product divisions
Can result in finger-pointing between divisions when something goes wrong
Firms pursuing a global standardization strategy focus on the realization of location and experience curve economies.
Headquarters maintains control over most decisions
The need for integrating mechanisms is high
Strong organizational cultures are encouraged
The worldwide product division is common