2.2 Corporate Strategies

A corporate strategy relates to the organization as a whole and to the combination of business units and product lines that make up the corporate entity. Strategic actions at this level usually relate to the acquisition of new businesses; additions or divestments of business units, plants or productions; and joint ventures with other organizations in new areas （Thompson, Gamble & Strickland, 2004）.

Corporate strategies depend on the complexity and scope of product and geographic diversification, which include multidomestic, global, and transnational strategies. The international corporate strategy can be distinguished from international business strategy by the scope of operations, in terms of both product and geographic diversification. They are adopted when a firm's level of product or service complexity expands to encompass multiple industries and multiple national markets or regions. The primary difference is the level at which strategy is directed: corporate strategy is directed from headquarters rather than by managers at the national or country level （Hitt, 2005）.

Multidomestic Strategy

Multidomestic strategy is one where strategic and operating decisions are decentralized to the strategic business unit in each country in order to tailor the products and services to the local market. The multidomestic strategy assumes that business units in different countries are assumed to be independent of each other, and that economies of scale are not possible because of demand for market-specific customization. This strategy contends that markets differ and can be segmented by national borders. So, products and services can be customized to meet individual markets needs or preferences. Finally, it focuses on competition within each country. Multidomestic strategy is a prominent approach among European firms because of the broad variety of cultures and markets found in Europe （Hitt, 2005）.

Global Strategy

A global strategy is one where standardized products are offered across country markets and competitive strategy is dictated by the home office. The primary focus is on efficiency through economies of scale and the leveraging of innovation across country markets. The global strategy assumes that strategic business units operating in each country are interdependent. Thus, it attempts to achieve integration across businesses and national markets, as directed by the home office. At same time it enables greater opportunities to utilize innovations developed at the home office or in one country in other national markets. Therefore, it requires resource-sharing and an emphasis on coordination across national borders. With emphasis on economies of scale this strategy often lacks responsiveness to local market needs and preferences. As a result, it is difficult to manage because of the need to closely coordinate strategies and operating decisions across borders. And lastly, it demands high levels of centralization and central headquarters control （Hitt, 2005）.

Transnational Strategy

A transnational strategy is a corporate strategy that seeks to achieve both global efficiency and local or national market responsiveness. This strategy is difficult to achieve because of simultaneous requirements for strong central control and coordination to achieve efficiency （global strategy） and local flexibility and decentralization to achieve local market responsiveness （multidomestic strategy）. Therefore, the coordinating mechanisms must be flexible to implement a transnational strategy. So doing, the firm must shape an organizational culture to pursue learning and build a shared vision and individual commitment through an integrated network to produce a core competence that would result in strategic competitiveness so that competitors would find difficult to imitate （Hitt, 2005）.