International Strategy: Context, Concepts and Implications

Chapter 11 The Modern Multinational Is There One Best Strategy? Are We All Transnational Now?

MOTIVATION

The preface began with a story about three books on global strategy. I conclude with three examples from recent Harvard Business School cases describing developments at ostensibly similar and successful FMCG multinationals – Danone, Unilever, and L'Oréal. And yet when you peel away the veneer of superficially similar global operations you see three very different approaches to competing internationally. Three different answers to the observation at Unilever that “you always have local consumers and you have the (product) categories – the question is not whether the tension is good or bad; the tension is good. The question is how you manage the tension.”¹

Danone believes that decentralization is essential to its multidomestic strategy. As the head of HR observed, “we think there are more disadvantages than advantages in looking for synergies, and the success of our decentralized management can be seen in our local brands.” “At Danone a managing director who is in charge of an activity in a country is the decision maker with P&L responsibility. Headquarters can merely suggest options to him, but cannot impose conditions.”²

Consistent with its heritage of a flexible – jeu de jambe³ – approach to management, Danone is moving “from a Western European company into an international organization with operations worldwide” so that “we can launch in 3 months while it takes Nestlé ...