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What does 'MNE’S need to be both “global” and “local”?' mean

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  1. Introduction.
  2. Key sources of the transnational structure.
    1. Competitiveness through global efficiency.
    2. Flexibility through local responsiveness.
    3. Learning as part of the innovation process.
  3. Side effects of the transnational structure.
    1. Tight complex controls and coordination.
    2. The administrative heritage.
  4. Towards a new approach of the transnational structure.
    1. A necessary understanding of the strategy.
    2. More a way of management.
  5. Conclusion.
  6. References.

Since the rise of liberalisation with the opening of markets in the mid 1980's, the business world has entered the era of globalisation where companies have dramatically expanded their business abroad. Indeed, the abolition of barriers of entry was one of significant opportunities for multinational enterprises to gain more market shares by sustaining their competitive advantage on a broader scale. However this situation of globalisation has shifted to a new period called the "semi-globalisation". In fact this expression quoted by Panos Mourdoukoutas highlights the new constraints imposed to most of multinational enterprises (MNE's). In fact new pressures have transformed the global competitive framework, forcing companies to rethink their traditional worldwide strategic approaches. Thereby they are nowadays doomed to be both globally efficient and locally responsive by adapting some elements of their strategy mix to the host country where they operate.

[...] Thus the need to cater to local interests and tastes is of major importance, hence capturing local opportunities ?niche market? often considered as very profitable. The example of the Macdonald strategy is particularly relevant as the food industry is all the more sensitive to national differences. While adopting a global strategy with the standardisation of operation and distribution, the fast food company varies its menus taking into account the religious beliefs or the local food tradition. For instance, in India, the hindese population does not eat beef as the cow is considered to be a sacred animal regarding the religion. [...]

[...] This essential question can be determined by understanding the management's philosophy and the firm's ability to adjust to organisational changes. In addition, the relative importance of international operations, past history and experience in the international arena will give a clearer overview on what the company wants to achieve compared to its competitors. Conclusion With the emergence of new imperatives created by the information age and the knowledge revolution and the coming of the service based economy, worldwide companies have to deal with the forces of globalisation in a different way. [...]

[...] They interviewed 236 managers of these worldwide companies and try to come with an efficient model which could respond to these two dual pressures as being and The most appropriate model reveals to be the modern transnational firm which could succeed in developing all these three capabilities simultaneously, that is to say, to compete on the basis of scale efficiency, to respond to national market and to transfer specialised knowledge Competitiveness through global efficiency In many industries, firms have come under great pressure to achieve economies of scale at the international level. [...]

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