Chupa Chups International Business Strategy
differences). The three last countries expose the company to many risks, mainly economical and financial, that the company has succeeded to manage.
Regarding scale economies, the company just starts to produce in different countries, balancing scales with strategic and operational flexibility.
Finally, the company transfers its knowledge to its subsidiaries, share investments, what refers to the last mean: scope economies.
- Learning: As said previously, producing in a few numbers of plants allows the company to benefit from experience, cost reduction and innovation (scale economies).
It also shares learning across the different countries, markets and businesses (scope economies)
But regarding the organisational and managerial processes it tends to stay on the Spanish way of doing business so does not learn from national differences.
ű International strategy and conclusion
Following Bartlett and Ghoshal perspective, companies have the choice between three strategies:
- Multidomestic strategy: responsiveness to each local market
- Global strategy: scale efficiency, focusing on one single global market
- Transnational strategy: mix of both previous strategies
First of all, the company is not transnational, as it does not use every goals and means combination.
The company identifies only one global market, selling standardised products everywhere, use the same business strategy worldwide, with only some minor adaptations lo local markets when necessary, locates its plants to benefit from economies of scale or proximity to emergent markets, uses global suppliers, coordinates its marketing worldwide, with minor adaptations to local need.
The structure of the company is a centralized global business management, with control from home country. So we can say that their strategy is rather global.
But in the same time it makes few adaptations to the product, the advertising and the distribution, leaves some autonomy to the subsidiaries, what makes it quite responsive to the market.
As a conclusion, no companies are totally local or totally global. Chupa Chups is rather global, but it tends to be quite sensitive to both dimensions: global integration and local responsiveness.
Transnational is not exactly the word to use there, even if I think that the company tends to become more transnational because it brings together advantages of both classical strategies.
On my point of view, this company has a multifocal strategy, trying to have advantages from global and multidomestic strategies at the same time, but not being transnational yet.
REFERENCING
ű Transnational Management: Text, Cases, and Readings in Cross Border Management – McGraw-Hill International Editions (2000)
ű International Business Management Courses – Philip Ryans
ű Stratégie d’entreprise, Chaine de valeur et avantage concurrentiel, French Courses 2