International Business Strategies and Global Logistics

Global Integration and Local Responsiveness

The horizontal side of the diagram is labeled “Pressures for local responsiveness,” ranging from weak at the left end to strong at the right end. The vertical side on the left is labeled “pressures for global integration,” from weak at the lower end to strong at the upper end.

Global Integration and Local Needs

AI: The top-left quarter, corresponding to strong to medium pressures for global integration and weak pressures for local responsiveness, indicates the need to:

• Seek cost reduction through scale economies.
• Capitalize on converging consumer trends and universal needs.
• Provide uniform service to global consumers.
• Conduct global sourcing.

AD: The bottom-right quarter, corresponding to strong pressures for local responsiveness and medium to weak pressures for global integration, indicates the need to:

• Leverage national endowments such as local talent.
• Cater to local customer needs.
• Accommodate differences in distribution channels.
• Respond to local competition.

International Business Strategy Frameworks

HR: International Strategy (Low global integration / Low local responsiveness):

• Exports the same product as in the home country.
• Sees international business as secondary.
• Does not adapt products or learn from abroad.

MU: Multi-Domestic Strategy (Low global integration / High local responsiveness):

• Adapts to each country’s language, culture, laws, and tastes.
• Each subsidiary operates independently.
• Competition is different in every country.

GS: Global Standardization Strategy (High global integration / Low local responsiveness):

• Standardized products worldwide.
• Centralized production and decisions.
• Focused on efficiency and economies of scale.

TS: Transnational Strategy (High global integration / High local responsiveness):

• Combines global efficiency with local adaptation.
• Standardizes where possible, adapts where necessary.
• The most difficult strategy to implement.

Incoterms and Shipping Logistics

• Group E: Seller delivers the goods to the buyer only at the seller’s own premises.
• Group F: Seller delivers the goods to a carrier appointed by the buyer.
• Group C: Seller contracts for carriage without assuming the risk of loss or damage to the goods.
• Group D: Seller bears all costs and risks to deliver goods to the destination determined by the buyer.

Trade Documentation and Barriers

LEC (Legal and Export Controls): Licenses, documentation, export declaration, commercial invoice, bill of lading, special certificates, other documents, and other barriers.

PD (Physical Distribution): International shipping and logistics, packing, and insurance.

EIC (Export/Import Costs): Tariffs and taxes.

Non-tariff barriers: Standards, inspection, documentation, quotas, fees, licenses, special certificates, and exchange permits.

International Staffing Approaches (ISA)

ISA: A firm’s staffing policy is concerned with the selection of employees who have the skills required to perform a particular job. There are three main approaches to staffing policy within international businesses:

1. The ethnocentric approach: Parent/home country nationals (HR).
2. The polycentric approach: Host country nationals (M).
3. The geocentric approach: Qualification regardless of nationality (T).