Bartlett and Ghoshal’s Theory
Bartlett and Ghoshal’s Theory
Bartlett and Ghoshal’s international, multi-domestic, transnational and global strategies
What is the Bartlett & Ghoshal Theory?
This theory examines the different approaches to managing businesses that operate internationally.
It highlights two key factors in choosing how to manage an international business:
- The potential cost gains from being globally integrated (such as marketing, production or research economies of scale)
- The pressures to respond to local market conditions.
Bartlett & Ghoshal – Diagram
Local responsiveness – Business considerations
- The company might have to consider the requirements of the local population
- The company will have have to consider the domestic competition it will face f of that country
Cost pressure – Business considerations
- The business must consider the implications/costs on the business of differentiating its product or service in a variety of global markets.
- The business must consider if it will be able to use the same branding and marketing techniques and materials to be successful internationally.
Multi-domestic: Low Integration and High Responsiveness e.g. Pfizer & Nestle
- Aims to meet the needs of the local market
- Tailor products and services to suit local market
- Low pressure for global integration
- Decentralised structure
- Unique marketing and sales approach to each individual market
- A good example would be Nestle and Pfizer
Global: High Integration and Low Responsiveness e.g. Pfizer
- Global companies are the opposite of multi-domestic companies.
- They offer the same product worldwide and have the
- Their goal is to maximize efficiencies in order to reduce costs as much as possible.
- Global companies are highly centralized
- All worldwide branches are very dependent on the headquarters.
- A company example would be Pfizer.
Transnational: High Integration and High Responsiveness e.g. Unilever
- A mix between both transnational and multidimensional.
- It will aim to respond both locally and gain benefits of integration.
- They will be independent but also integrated with their headquarters and strive to achieve the company’s global mission, aim and objective.
- A great example of a transnational company is Unilever.
International: Low Integration and Low Responsiveness
- This strategy was not originally in Bartlett & Ghoshal’s theory. This part of the theory was created by others.
- This part of the theory believes there is little need for local adaptation and global integration.
- The majority of the main activities will be maintained at the headquarter.
- This strategy is also often related to an exporting strategy.
- A good example would be large wine brands around the world.
What is the Bartlett & Ghoshal Theory? (2 marks)
Please draw the Bartlett & Ghoshal theory diagram? (4 marks)
Explain the multi-domestic strategy of the Bartlett & Ghoshal theory? (3 marks)
Explain the global strategy of the Bartlett & Ghoshal theory? (3 marks)
Explain the transnational strategy of the Bartlett & Ghoshal theory? (3 marks)
Explain the international strategy of the Bartlett & Ghoshal theory? (3 marks)