GSM Lecture 6

Management > Global Strategic Management > 2x2 matrix > Pressures > Global integration > local responsiveness

Pressures for local responsiveness

Differences in consumer needs - responsiveness is required when needs differ between countries

Differences in distribution channels - When distribution channels differ between countries, local responsiveness is needed to deal with differences in pricing, promotion, and product positioning.

Availability of local substitutes - related to Porter's Five Forces, local responsiveness is sometimes required if adaptations of the product is needed to compete with local substitutes.

Host government demands - Countries have differing rules and regulations imposed by each government, which require a local response.

Market structure - in concentrated local markets (such as oligopolies), firms must react to the actions of local rivals.

In conclusion it appears that the drivers of localisation are partly nation-specific, and partly industry and firm-specific.

The formulation of strategy