The Integration Responsiveness Grid

Jul 8th, 2015
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University of Western States
Course: general
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Companies adopt the international strategy when they aim to leveragetheir core competencies by expanding opportunistically into foreign markets. The international model relies on local subsidiaries in each country to administer business as instructed by headquarters.Ultimately, it is the source of new products, processes and ideas for its overseas operations and ultimate control resides with managers at headquarters who reason they best know the basis and potential extensions of the company’s core competencies.

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Types of StrategyWhile designing strategy to conduct business activities in a foreign environment, managers consider various factors like growth opportunities, cost reductions, and diversification within a context of satisfying the competing demands of global integration and local responsiveness. And managers take a variety of perspectives to guide how they decide to run their operations to hit their goals and deal with this challenge. Generally, managers of MNEs choose from four basic strategies to guide how they will enter and compete in the international environment:a) International Strategy;b) Multi-domestic Strategy;c) Global Strategy; &d) Transnational Strategy.Following figure will make it clear to identify general conditions that shape the decision of when to use which type of strategy within the context of the integration-responsiveness grid. FigureThe Integration Responsiveness GridPressure for Global IntegrationHighGlobalViews the world as a single market;Tightly controls global operations from headquarters to preserve focus on standardization. TransnationalFlexible value chain enables local responsiveness;Complex coordination mechanisms enab

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