Those firms that are engaged in international trade opportunities can and should approach the international market using either one of these two strategies: multinational, or global strategies. It is a necessity to note that both of the strategies do not consist of companies that export. Exporters should therefore devise a necessary and most appropriate strategy for exporting in place.
A multinational strategy is often followed by many international firms; the strategy is simply where a firm will adapt its product and or marketing strategies to address those local preferences of the national market they seek to do business in. More simply put, the strategy is basically what the name suggests, it’s basically a unique strategy for each of the multiple countries in which the firms markets its products or services. In order to establish a multinational strategy, firms often create large independent, self coherent units in each international market. Most likely, these international locations will undertake its own operation research, and development, as well manufacturing and marketing. Each international unit will remain to the parent unit there for creating one large independent firm.
Multinational strategies are often mostly employed for firms in those industries in which the buyer demand does not weaken across international borders, for instance, the major benefit of using a multinational strategy is that it enables firms to monitor and assess their buyer preferences much closely and each local international market as well to address any issues more quickly and effective as if new buyer preferences were to be created. The result is that firms hope for when the customers demand for products changes that the firm being in the location itself can deliver greater value than their competitors because they will be able to charge lower prices and thus gain increased market share. The drawback of multinational strategies are that they do not allow firms to exploit those nations economies in marketing, manufacturing, product development.
Global strategy: a strategy in which the firm will offer similar products basically similar market campaigns in all international markets. Firms that often follow global strategy will find advantageous the location; but manufacturing large inventories of products and or components in a few very limited locations. Within these locations, they usually undergo product research and development, as well establish new editorial campaigns and promotional strategies throughout their international headquarters. Where the largest benefits of a global strategy is that it saves costs basically in part to the product and marketing becoming more standardized. The major issue with a global strategy is that it may lead to a firm to overlook critical differences in buyer preferences from one international market to another international market.