Step 1: Read the following: Please help with step 3 in this case study questions.

Many operations strategies now require an international dimension. An international business is a firm that engages in international trade or investment. A multinational corporation (MNC) is a firm with extensive international business involvement. It buys resources, create goods or services and sell goods or services in a variety of countries. Operations managers of international and multinational firms approach global opportunities with one of four operation strategies: International strategy Multidomestic strategy Global strategy Transnational strategy The four strategies are related to two variables: Local responsiveness: the degree of differentiation among the strategies followed by a certain company in every country in order to adapt the products to the local market. Cost reduction: the degree of cost advantage that the strategy gives to the company over the industry rivals.

2.8.1. International strategy An international strategy uses exports and licenses to penetrate the global arena. It is the least advantageous strategy, with little local responsiveness, as these companies sell the same product in every country, and little low cost advantage because they use their existing production process at some distance from the new market. Thus, an international strategy implies both low local responsiveness and cost reduction. However, an international strategy is often the easiest one, as exports can require little change in existing operations, and licensing agreements often leave much of the risk to the licensee. In an international strategy markets are penetrated using exports and licenses. An example of a company that follows an international strategy is Harley Davidson which sells Made in America products all over the world by exporting them from the US.

2.8.2. Multidomestic strategy The multidomestic strategy has decentralized authority with substantial autonomy at each business by creating subsidiaries, franchises or joint ventures with substantial independence. The advantage of this strategy is maximizing a competitive response for the local market, however this strategy has little or no cost advantage. It is a strategy in which operating decisions are decentralized to each country to enhance local responsiveness. An example of a company that follows this strategy is McDonalds that, depending on the country, uses different strategies. For instance, in France, where people do not like fast-food restaurants, McDonalds created a sophisticated line of restaurants; in India, where people cannot eat meat, they created a sort of veggie restaurants.

2.8.3. Global strategy A global strategy has a high degree of centralization, with headquarters coordinating the organization to seek out standardization and learning between plants, thus generating economies of scale. This strategy is appropriate when the strategy focus is cost reduction but has little to recommend it when demand for local responsiveness is high. It is commonly used by companies that produce customer hidden products. Thus, it is a strategy in which operating decisions are centralized and headquarters coordinates the standardization and learning between facilities. An example of a company that uses this strategy is Microsoft, which centralizes its process in the headquarters and the product is standardized in the whole planet and the only thing they change is the language of their programs. Other example might be apple. With this video we can better understand how this type of companies works, and how their products are standardized changing just few things/features:

2.8.4. Transnational strategy A transnational strategy exploits the economies of scale and learning, as well as pressure for responsiveness, by recognizing the core competence that does not reside in just the home country but anywhere else in the organization. Transnational describes a condition in which material, people, and ideas, cross national boundaries. Transnational companies are thought of as world companies whose country identity is not as important as its independent network of worldwide operations. Key activities in a transnational company are neither centralized in the parent company nor decentralized so that each subsidiary can carry its own tasks on a local basis. Instead, resources and activities are dispersed, but specialized, so as to be both efficient and flexible in an interdependent network. Thus, a transnational strategy combines the benefits of global-scale efficiencies with the benefits of local responsiveness. An example of a transnational company is Nestl, which is actually from Switzerland but 95% of their assets and 98% of their sales take part abroad, so the country identity of Nestl is really low and thus, it is a world company.

Step 3: What is operations strategy? What are reasons to internationalize operations? Create a table and include each of the four operations strategies. In the table, include the organization that fits with each strategy. List four items in each quadrant that demonstrates the type of international dimension that aligns with what you read. Imagine that you were applying for a job at one of the four companies, what types of jobs were available in Operations Management? What additional skills would you need if you were going to apply for an Operations Management job in the global domain?