Academic journal article Advances in Competitiveness Research

An Empirical Study of the Desirability and Challenges of Implementing Transnational Marketing Strategies

Academic journal article Advances in Competitiveness Research

An Empirical Study of the Desirability and Challenges of Implementing Transnational Marketing Strategies

Article excerpt

ABSTRACT

The integration-responsiveness (I-R) framework was employed to study the relationship among the alternate international marketing strategies (multidomestic, multifocal, global, transnational). Specifically, the study investigated whether firms which employ marketing strategies that are closer to the transnational model perceive their marketing performance to be higher than those of firms that employ other international marketing strategy types. Data were obtained from a survey of SBUs in large U.S.-based MNEs and then analyzed to evaluate the performance of the SBU's marketing under the alternate international marketing strategies. Results indicate a significant, positive relationship between the extent to which the SBU international marketing strategy approaches that of the transnational type, and the perceived marketing performance of the SBU. The findings suggest that greater improvements in MNE SBU marketing performance are obtained as the efficiencies from global integration and the flexibilities from national responsiveness are pursued without a tradeoff of one for the other. However, the findings also suggest that there may be limitations to the desirability and attainment of transnational strategies from increasing national responsiveness and/or global integration.

INTRODUCTION

Globalization has generated increased demands on multinational enterprises (MNEs) to formulate and implement international strategies that respond to pressures for both external flexibility and internal efficiency (Yip, 1989, 1995). Which international strategy is actually pursued will depend upon the characteristics (e.g., opportunities, constraints) of the external environment, the firm's internal capabilities, and the tradeoffs associated with responding to the pressures for external flexibility, via national responsiveness, and internal efficiency, via global integration. However, prior research has advocated the pursuit of transnational strategies based on the arguments that these strategies reflect overcoming the tradeoffs and, thus, provide for the simultaneous attainment of both external flexibility and internal efficiency. MNEs that pursue transnational strategies are, therefore, argued to obtain greater performance results than those MNEs that do not pursue such strategies (Bartlett and Ghoshal, 1991). However, empirical research to support such results is generally lacking. Building upon and extending the ideas from prior research, this study employs the integration-responsiveness (I-R) framework (Doz, 1980) in an exploratory attempt to further the understanding of these relationships and tradeoffs. The paper reviews the relevant literature on international strategies and the (I-R) framework, with key underlying assumptions identified. A hypothesis is developed, a methodology to test the hypothesis presented, and test results for international marketing strategies reported. Finally, the results are discussed.

PRIOR RESEARCH

Globalization

Made possible by innovations in transportation, communications, and information technology (Macharzina, 1999), globalization is a pervasive and important phenomenon for MNEs that involves the geographic and temporal spread of multitudes of factors, including products, services, people, capital, and operations, throughout a world marked by increasingly porous national boundaries (Boudreau, Loch, Robey, and Straud, 1998; Braga, 1996; Kanter and Dretler, 1998). This spread has led to the acceleration of interdependence within and among MNEs, nation-states, and their stakeholders in economic, political and socio-cultural arenas and across many boundaries (e.g., nations, cultures, economies, technologies, and so forth). Because a fundamental characteristic of interdependence is the existence of relationships in both the MNEs external and internal environments (Gladwin and Wasilewski, 1986), acceleration of interdependence often translates into an acceleration of relationships, prompting MNEs to give heightened attention to the development and management of both the internal and external relationships in the global arena (Bartlett and Ghoshal, 1991; Boudreau, et. …

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