Which of the following is inaccurate in Anna’s presentation?

Anna has been tasked with determining the appropriate international strategy for a corporation which provides a variety of upscale household products. She has decided to present her findings in a business case that explains the various international strategies.

Which of the following is inaccurate in Anna’s presentation?
A . An advantage of a franchising strategy in foreign markets include having franchisees bear most of the costs of establishing foreign locations and requiring the franchiser to expend only the resources to train, and support foreign franchisees.
B . A multidomestic type of strategy focuses on the competitive approach of economies of scale and efficiency in all countries where the firm does business.
C . The multidomestic strategy is appropriate when country-to-country differences in buyer tastes, cultural traditions, and market conditions vary significantly.
D . A "think global, act global" approach to strategy making is preferable when country-to-country differences are small enough to be accommodated within the framework of a mostly uniform global
strategy.

View Answer

Answer: B

Explanation:

Multidomestic companies do not have the advantage of economies of scale or efficiency – global companies do. Multidomestic companies have the advantage of a strong foothold in the local market, and an ability to customize for the specific market (which sacrifices economies of scale).

The advantages of a global strategy include economies of scale and efficiency as global companies offer a standardized product worldwide and have the goal to maximize efficiencies in order to reduce costs and quality risks.