Business Clinic for Finance

Rick Politician
87345
5/7/2007
I BUS 300
Chapter 12 Homework
MTV is definitely adapting a Multidomestic Strategy.  From the opening case, one can conclude that MTV tailors programming and veejays to individual countries or regions tastes.  The best way to reach each region is to have shows that relate to the local populations interests and play music from local favorites.  The cost pressures are low since most people do not pay for MTV directly, but through cable and satellite companies and in package deals.

Intel can be described as having a Global Strategy.  They do not need to tailor their chips to each countries market since almost all PC’s across the globe run on the same components.  Instead, Intel focuses on keeping the prices down on their chips so their competitors like AMD and Athlon do gain market share on Intel.  There are foreign firms as well that could increase market share if Intel’s prices rose to high.

I think Caterpillar would also have a Transnational Strategy.  They must keep prices down in order to ward of competition and keep market share from companies like Komatsu.  In addition, Caterpillar must make their products comply with domestic standards and policy in each country.

Microsoft uses an International strategy.  They almost have a monopoly on PC operating systems and have vast resources to design new and better products, so there is little price competition from other firms.  Their main products are developed here in Jackson and shipped all over the world.  Although they may change the language settings for each country, there is little modification needed.

 

b.
In 1995, Royal Dutch/Shell made their organizational structure more centralized.  They created 5 subunits, one functional and four dedicated to products.  The geographical area managers had less of a role in the company.  These managers now focused on diplomacy with countries and being the integrated mechanism between the subunits.  The cost controls were much higher as a large corporate headquarters in London kept track of and organized all of the decentralized activity.  The performance ambiguity were also high because the corporate office only had superficial information and opinion from the managers on what was effecting the success or failure of a specific unit.

Before 1995, the Royal Dutch/Shell was much more decentralized with the individual business unit managers making most of their own decisions.  Production and processing facilities were localized to different areas all over the globe.  Since they are such a big MNE the costs of control and performance ambiguity will still be high, but not as high as with the organizational structure before the change.