Global Operations: Developing Business Strategies for Global Expansion

This presentation discusses the development of business strategies for global expansion, specifically for Merchant & Mills, a UK-based clothing company. It explores the four global business strategies and recommends the transnational strategy for its benefits of centralization and local market responsiveness. The risks involved in this strategy are also discussed, along with ways to mitigate them.

Global Operations
Presentation

Table of Contents
INTRODUCTION...............................................................................................................................3
TASK....................................................................................................................................................3
CONCLUSION....................................................................................................................................5
REFERENCES....................................................................................................................................6

INTRODUCTION
A global strategy refers to the organizations’ strategic guide to globalization. It
involves strategic thinking in an integrated manner regarding the aspects of business,
suppliers, markets and competition, etc. It involves evaluating every product of the company
in view of domestic as well as international market standards (Haller and Louis, 2021). The
following project will discuss the development of business strategies to effectively establish a
business in a global context.
TASK
The business managers feel concerned about global business strategy due to the
tradeoff between global integration and local responsiveness. Global integration refers to the
level upto which the company is able to use the same products and processes in other
international markets. Local responsiveness is the level to which the business must be able to
customize its products processes for meeting the conditions of other countries it formed the
basis of four basic Global business strategies that the business can opt from. The chosen
business is Merchant & Mills i.e. a UK based clothing company in retail industry and
required a business expansion. The company deals in clothing products and haberdashery
products as well. The following are the four global business strategies in this context –
 Export Strategy – This strategy is used by those companies that focus mainly on its
domestic operations. In this, the businesses do not intend to expand globally but
export their products to other countries to get benefit of the international
opportunities. The customization of products is not involved for international markets.
It does not aim at creating an integrated global strategy (Rogeberg, Bergsvik and
Clausen, 2022). In context with Merchant & Mills, it can follow this strategy to access
global market without customizing its products. But company following this strategy
has to face the political risks of trade restrictions on export of their products. The
company would have to face the risks of blocked exports if it does not meet its
contractual obligations. But the export strategy provides the benefits of extending the
business to a global scale and access to a global market of buyers.
 Standardization Strategy – This strategy is used by the company when it assumes that
its product can meet the demand of people present everywhere. When the company
considers the entire world to be a single market, it follows this strategy. The
standardization strategy provides efficiencies by centralizing many similar activities

like product design, reduction in market costs, simplifying the supply chain etc.
(Kano, Ciravegna and Rattalino, 2021). As Merchant and Mills is operating on a small
scale, it would not be appropriate for the company to adopt this strategy as it limits
uniqueness in the products that must not be adopted by small scale companies. Also,
the company will have to incur the costs related to standardization such market
research for product design.
 Multi-domestic Strategy – This strategy focuses on customization of products or
processes to the specific conditions in each country. This strategy is mostly used by
the retailers as they have to meet the local customer tastes first. Then company that
follows this strategy, its entire management is centralized in the home country but the
country managers are provided freedom to make adaptations. In context with
Merchant & Mills, it should not follow this strategy as in this strategy, the company
faces more uncertainties due to the tailored strategies in different countries.
 Transnational Strategy – It is a combination of standardization and multi-domestic
strategy and is used by the company when it faces significant cost pressure from the
international competitors and also offer the products that meet the local customer
needs. It is the most difficult strategy to maintain as through this strategy the company
needs to achieve the economies of scale through standardization and needs to be
flexible to respond to the local conditions (Vanderhoef, 2021). If M&M opts to
choose this strategy for expanding its operations globally, it will have the advantage
of centralization of resources as this strategy is less costly than a multi-domestic
strategy.
It is recommended to Merchant & Mills to adopt the Transnational strategy of
business expansion of operations on a global basis. By following this strategy, the
company will be able to effectively penetrate its local market and create a large domestic
customer base in a quick manner. Also, the strategy is more suitable than any other
expansion strategy as the export strategy has political risks involved and multi-domestic
strategy is also more risky than Transnational strategy. Standardization strategy also
include more cists in research of international markets.
But Transnational Strategy prioritizes global standardization and efficiency. To
develop a Transnational strategy, M&M will require a strong central control and
coordination to achieve efficiency and local flexibility and decentralization for achieving
the local market responsiveness. It also contains some of the positive elements of multi-

domestic and standardization strategy providing the benefits of centralization to the
company.
The main risks involved in the Transnational strategy are alienating of local customers
and difficulty in centralizing all locations. To mitigate the risks of alienating local
customers, M&M will have to hire local employees at all levels of business and will have
to listen to their feedbacks about the business operations in their countries. This can avoid
the risk of alienating the local customers (Transnational Strategy: Definition, Benefits
and Challenges, 2022).
The risk of centralization can be mitigated by creating a capable management team so
as to ensure brand management in all locations. M&M managers will have to report to the
local offices if they are at headquarters or vice-versa. These managers must hold a strong
grip on the global strategies of this business so as to be reflected by the local offices as
well.
CONCLUSION
It can be analyzed form the above project that to expand the business operations on a
global scale, a business organizations need to adopt a suitable strategy of international
expansion that it must be able to manage the costs and risks of. It has been observed that
although multi-domestic strategy is better for retail businesses but it is more costly than a
Transnational strategy. Also, the Transnational strategy helps in penetrating the local market
and helps in achieving centralization of resources.

REFERENCES
Books and journals
Haller, C. and Louis, B., 2021. Development of a Regional Digital Strategy: Case of the
wine. alsace Domain Name. In Handbook of Research on User Experience in Web 2.0
Technologies and Its Impact on Universities and Businesses (pp. 109-123). IGI
Global.
Kano, L., Ciravegna, L. and Rattalino, F., 2021. The family as a platform for FSA
development: Enriching new internalization theory with insights from family firm
research. Journal of International Business Studies, 52(1), pp.148-160.
Rogeberg, O., Bergsvik, D. and Clausen, T., 2022. Opioid overdose deaths and the expansion
of opioid agonist treatment: a population-based prospective cohort study. Addiction,
117(5), pp.1363-1371.
Transnational Strategy: Definition, Benefits and Challenges, 2022 [online] available through
<https://www.indeed.com/career-advice/career-development/transnational-strategy >
Vanderhoef, J., 2021. Indie Games of No Nation: The Transnational Indie Imaginary and the
Occlusion of National Markers. In Game History and the Local (pp. 159-176).
Palgrave Macmillan, Cham