Apply the integration-responsiveness framework to evaluate the four different strategies MNEs can pursue when competing globally.
■ To navigate between the competing pressures of cost reductions and local responsiveness, MNEs have four strategy options: international, multidomestic, global-standardization, and transnational.
■ An international strategy leverages home-based core competencies into foreign markets, primarily through exports. It is useful when the MNE faces low pressures for both local responsiveness and cost reductions.
■ A multidomestic strategy attempts to maximize local responsiveness in the face of low pressure for cost reductions. It is costly and inefficient because it requires the duplication of key business functions in multiple countries.
■ A global-standardization strategy seeks to reap economies of scale and location by pursuing a global division of labor based on wherever bestof-class capabilities reside at the lowest cost. It involves little or no local responsiveness.
■ A transnational strategy attempts to combine the high local responsiveness of a localization strategy with the lowest-cost position attainable from a global-standardization strategy. It also aims to benefit from global learning. Although appealing, it is difficult to implement due to the organizational complexities involved.