As the pressure to lower costs increases, firms move toward selecting global and transnational strategies for competing in the global marketplace.

Question

Quizplus · Accepted Answer

The two opposing pressures result in four different basic strategies that companies can use to compete in the global marketplace: international, global, multidomestic, and transnational. The strategy that a firm selects depends on the degree of pressure that it is facing for cost reductions and the importance of adapting to local markets. Exhibit 7.4 shows the conditions under which each of these strategies would be most appropriate. As the pressures to lower costs increase, firms move from international strategy to global strategy. As the pressures for local adaption increase, at the same time as the pressures to lower costs increase, firms move from multidomestic strategy to transnational strategy.

As the Pressure to Lower Costs Increases, Firms Move Toward