For those firms in multidomestic industries - those industries in which competitiveness is determined on a country-by-country basis rather than a global basis - regional strategies are more appropriate than globalization.39 The regionalization (or multilocal) strategy is one in which local markets are linked together within a region, allowing more local responsiveness and specialization. Top managers within each region decide on their own investment locations, product mixes, and competitive positioning; in other words, they run their subsidiaries as quasi independent organizations.
As there are pressures to globalize - such as the need for economies of scale to compete on cost - there are opposing pressures to regionalize, especially for Newly Developed Economies (NDEs) and LDCs. These localization pressures include unique consumer preferences resulting from cultural or national differences (perhaps something as simple as right-hand-drive cars for Japan), domestic subsidies, and new production technologies that facilitate product variation for less cost than before. By “acting local” firms can focus individually in each country or region on the local market needs for product or service characteristics, distribution, customer support, and so on.
As with any management function, the strategic choice as to where a company should position itself along the globalization - regionalization continuum is contingent on the nature of the industry, the type of company, the company's goals and strengths (or weaknesses), and the nature of its subsidiaries, among many factors. In addition, each company's strategic approach should be unique in adapting to its own environment. Many firms may try to “go global, act local” to trade off the best advantages of each strategy. Matsushita is one firm with considerable expertise at being a “CLOCAL” firm (global, local). Matsushita has over 150 production and R&D bases in 38 countries. In Malaysia, for example, where Matsushita employs 23,500 people in its 13 subsidiaries, the company diligently follows its policy of trying to keep the expatriate headcount down and train local managers; only 230 employees there are Japanese. Other Matsushita local policies are to develop local R&D to tailor products to markets, to let plants set their own rules, and to be a good corporate citizen in every country.
Regionalization : Formulating Strategy article from Formulating Implement Catagory Regionalization
Regionalization Formulating Strategy article from Formulating Strategy Formulating Implement.Free learning from data about Regionalization Formulating Strategy Formulating Implement Business Management,online business management,business management classes,online business management degrees