Within the context of the increasingly international environment in which organizations compete, contrast the global approach and the local approach to business

What will be an ideal response?

Answer: A global approach involves the integration of activities on a coordinated, worldwide basis. Firms are likely to use a global approach if the benefits gained from worldwide volumes, efficiencies, or economies of scale are significant. These benefits include economies of scale for production, greater leverage of high-cost distribution networks, and higher leverage of expensive R&D activities. In contrast, differences among countries and customer preferences are two key factors that drive companies toward a local approach. A local approach involves the tendency to differentiate activities country-by-country in order to meet the needs of the local markets. Firms often use a local approach when the benefits from location-specific differentiation and adaptation are significant and economies of scale are small.