CORPORATE STRATEGIES Vs BUSINESS STRATEGIES

Corporate Strategy

At the top level of an organization, corporate strategies should set out a clear mission and vision
for the entire company. The overarching ambition of the complete group and the difference they
want to make in the world. A corporate strategy is about describing the ultimate ambition of the
organization and expressing a clear, overarching objective for the firm.

Based on that corporate vision, the corporate strategy will concern itself with which ‘businesses’
the organization wants to be in – what industries they want to be active in. Corporate strategy is
all about achieving the right mix of business units to answer the overall corporate objectives of
the whole organization.

Corporate strategy should also address how the group of business units will be managed. For
example, corporate strategies need to be concerned with efficiencies and mutual benefits across
the whole organization.

So how can the activities of one subsidiary benefit another business unit within the firm? What
strategic assets can be shared, leveraged across different areas of the corporation? Corporate
strategy should look for synergies across the whole organization that could drive performance.
Without a strategy at the corporate level, these efficiencies cannot be achieved, and each
business will be implementing their own business strategy in isolation and failing to access and
leverage assets and capabilities in other areas of the group. Without a corporate strategy sitting
above the various business strategies, the overall organization would fail to become greater than
the sum of its parts.

A corporate strategy typically looks longer term than a business strategy. Corporate strategies are
focused on how the overall organization can achieve its long-term vision to deliver against
shareholder expectations. The primary purpose of having a corporate strategy is to create a clear
plan for ensuring the organization is sustainable in the long-term.

A corporate strategy might concern itself with:

Stability
Expansion
Retrenchment
Combination

Insofar as the above strategic decisions will enable the corporation to successfully compete in the
industries, businesses and markets that have been deemed strategically important.

Business Strategy

In large corporate companies, there are typically a number of business units or

divisions/departments that will each have their own business level strategy. That strategy is
concerned with how that business unit will compete and succeed in the particular
market/business that the corporate strategy has decided the organization wants to be in.

Business strategy will focus on how that business will compete in the market, their product
offering and their customer satisfaction. It constitutes the plan for how that business will
contribute to and achieve the overall corporate objectives.

Where the corporate strategy focuses on the overall profitability and long-term stability of the
entire organization, at the business level, the strategy is about competitive advantage and market
share for the particular products or services of that business unit.

Business strategies focus on how the business unit will compete and may involve strategies such
as:

• Cost Leadership
• Cost Focus
• Differentiation Leadership
• Differentiation Focus

GROWTH STRATEGIES

Internal Growth Strategies:

The term strategy means a well-planned, deliberate and overall course of action to achieve
specific objectives.
Growth Strategy’ refers to a strategic plan formulated and implemented for expanding firm’s
business. Every firm has to develop its own growth strategy according to its own characteristics
and environment.

Internal growth strategy refers to the growth within the organisation by using internal resources.
Internal growth strategy focus on developing new products, increasing efficiency, hiring the right
people, better marketing etc. Internal growth strategy can take place either by expansion,
diversification and modernisation.

I. Internal Growth Strategies

A. Expansion:
Business expansion refers to raising the market share, sales revenue and profit of the present
product or services. The business can be expanded through product development, market
development, expanding the line of product etc.

Expansion leads to better utilisation of the resources and to face the competition efficiently.
Business expansion provides economics of large-scale operations.

Business can be expanded through:-

a. Market penetration strategy:
This strategy involves selling existing products to existing markets. To penetrate and capture the
market, a firm may cut prices, improve distribution network, increase promotional activities etc.

b. Market Development strategy:

This strategy involves extending existing products to new market. This strategy aims at reaching
new customer segments or expansion into new geographic areas. Market development aims to
increase sales by capturing new market area.

c. Product Development strategy:

This strategy involves developing new products for existing markets or for new markets. Product
development means making some modifications in the existing product to give value to the
customers for their purchase.

B. Diversification:
Diversification is another form of internal growth strategy. The purpose of diversification is to
allow the company to enter new lines of business that are different from current operations.
There are four types of diversification:

a) Vertical diversification

b) Horizontal diversification

c) Concentric diversification

d) Conglomerate diversification

a) Vertical Diversification

Vertical diversification is also called as vertical integration. In vertical integration new products
or services are added which are complementary to the present product line or service. The
purpose of vertical diversification is to improve economic and marketing ability of the firm.
Vertical diversification includes:

i. Backward integration:
In backward integration, the company expands its business activities in such a way that it moves
backward of its present line of business.

Example:
Despite of being the leaders in Textiles, to strengthen his Position, Dhirubhai Ambani decided to
integrate backwards and produce fibres.

ii. Forward integration:

In forward integration, the company expands its activities in such a way that it moves ahead of
its present line of business.

Example:
New Zealand based Natural health care products company Comvita purchased its Hong Kong
distributor Green Life Ltd. And thus achieved forward integration by having access to greenlife’s
retail stores, sales staff and in store promoters.

b) Horizontal Diversification:
Horizontal diversification involves addition of parallel products to the existing product line.

For example: A company, manufacturing refrigerator may enter into manufacturing air
conditioners. The purpose of horizontal diversification is to expand market area and to cut down
competition.

c) Concentric diversification:
When a firm diversifies into business, which is related with its present business it is called
concentric diversification. It is an extreme form of horizontal diversification. For example: Car
dealer may start a finance company to finance hire purchase of cars.

d) Conglomerate diversification:
When a firm diversifies into business, which is not related to its existing business both in terms
of marketing and technology it is called conglomerate diversification. It involves totally a new
area of business. There is no relation between the new product and the existing product.

II. External Growth Strategies:

Foreign Collaboration:
Collaboration means cooperation. It means coming together. Collaboration is the act of working
jointly. It is a process where two people or organisation comes together for the achievement of
common goal.

With the advent of globalisation, foreign trade and foreign investments are encouraged to
increase the volume of trade. This concept gave rise to foreign collaboration to acquire expertise
in the manufacturing process, gain technical know-how and market or promote the products or
services to the foreign countries.

Foreign collaboration is an agreement or contract between companies or government of domestic

country and foreign country to achieve a common objective. Foreign collaboration is a business
structure formed by two or more parties for a specific purpose.

It is collaboration where the domestic firm and the foreign firm join hands together to achieve a
common goal. Foreign collaboration helps in removing financial, technological and managerial
gap in the developing countries. It is recognised as an important supplement for development of
the country and for securing scientific and technical know-how.

Foreign Collaboration may be defined as “An agreement between two companies from two
different countries for mutual help, co-operation and also for sharing the benefits in common”.

Joint Ventures:
Joint venture is a growth strategy in which two or more companies, establish a new enterprise (or
organisation) by participating in the equity capital of the new organisation and by agreeing to
participate in its management in an agreed manner.

A firm or a company may have a joint venture with another company of the same country or a
foreign country. Some examples of joint ventures: Tata Iron and Steel Co. joined hands with
IPICOL of Orissa to form IPITATA Sponge Iron Ltd; Hindustan Computers Ltd. and Hewlett
Packard of USA formed a joint venture named HCL-HP Ltd; Tungabhadra Industries Ltd. of
India and Yamaha Motor Company Ltd. of Japan formed a joint-venture Birla Yamaha Ltd. etc.

For ensuring success of a joint venture, the co-venturers must agree in advance on:
1. Objectives of joint venture

2. Equity participation of co-venturers

3. Management pattern etc.

Advantages of Joint Ventures:

As a growth strategy, joint-venture provides the following advantages:
(i) In case joint venture involves a foreign partner, the problem of foreign exchange is solved to a
great extent; if the foreign partner brings latest machines etc. from the other country.

(ii) Through joint venture approach, risk of business is shared among partners. In fact, high risk
involved in a new project can be reduced considerably by mutual sharing of such risk.

(iii) The foreign partner in a joint venture can provide advanced technology, not available within
the country

(iv) Joint venture of companies, within the same country, helps to reduce competition.
(v) Joint venture strategy provides opportunity to small firms to become big through joining with
others and add to their prospects of survival.

Mergers:
Merger, as a growth strategy, implies combination (or integration) of two or more companies
into one. Merger may take place with a co-operative approach or it may take place with a hostile
approach. In the latter case, a merger is known as a takeover.

Mergers are of the following four types:

(a) Horizontal Mergers:
In this type of merger, different business units which have been competing with one another in
the same business line join together and form a combination. The Indian Jute Mills Association,
the Indian Paper Mill Makers’ Association and Associated Cement Companies (ACC) are some
popular examples of horizontal merger.

Advantages of Horizontal Merger:

(i) Horizontal merger eliminates cut-throat competition among units, which are engaged in the
same business line.

(ii) It helps to secure economies of large scale operation; and thereby, reduces cost per unit of
output.

(iii) It can avail of external economies in respect of transport, insurance, banking services etc.

(iv) It increases competitive power of the group and provides synergistic effect.

(b) Vertical Mergers:

Vertical merger arises as a result of integration of those units which are engaged in different
stages of production of product. It is also known as sequence or process merger. Vertical merger
may be backward or forward. When manufacturers at successive stages of production integrate
backwards up to the source of raw materials; it is known as backward merger.

On the other hand, when manufacturing units combine with business units which distribute their
product; it is known as forward integration or merger.

Backward merger is adopted to have a control over sources of raw-materials; while forward
merger aims at attaining control over channels of distribution eliminating middlemen’s profits.

Examples:
A textile unit takes over cotton ginning and yarn spinning units to get smooth supply of raw
materials. It is a case of backward merger. A textile company manufacturing various kinds of
cloth takes over wholesalers and retailers engaged in marketing its product. It is a case of
forward merger.

Advantages of vertical merger:

(These advantages are common to both – backward and forward mergers).

(i) Various processes of production can be arranged in a continuous sequence; as they are under
common control.

(ii) There is saving in management costs because of common administrative control.

(iii)Vertical merger facilitates research in production processes because of integration of

processes.

(c) Concentric Merger:

(Concentric means having the same centre) Concentric merger takes place when companies
which are similar either in terms of technology or marketing system, combine with each other i.e.
combining units do production with the same technology or use the same distribution channels.

(d) Conglomerate Merger:

(Conglomerate means a larger company that is formed by joining together different firms). When
two or more unrelated or dissimilar firms combine together; it is known as a conglomerate
merger. It implies dissimilar products or services under common control. When e.g. a footwear
company combines with a cement company or a ready-made garment manufacturer etc.; a
conglomerate merger comes into existence.

Retrenchment Strategies:
What is Retrenchment Strategy?
Retrenchment strategy is a process through which you cut down all of those products and
services that aren’t profiting your business to achieve financial stability. It also means leaving
the market where your business can’t sustain itself. It usually results in the form of the sale of
assets like product line and firing employees.

Types of Retrenchment Strategies with Examples

Some of the main types of retrenchment strategies are as follows;

Turnaround Strategy
Turnaround strategy is a tool/measure that minimizes the negative trends that impact the
company’s performance. It also goes by the name of management measure that could transform
the sick business into a healthy position.
The measure also reverses the negative trends like decreasing market share, increasing material
cost, lower sales, widening debt-equity ratio, less profitability, working capital issues, negative
cash flows, and many other problems. The way businesses follow this strategy; varies from
situation to situation.
For instance, Dell Technologies stated in 2006 that the company would follow the cost-cutting
strategy by directly selling its products to the customers. The direct sale didn’t work out, and the
company faced a tremendous financial loss.
Dell turnaround and pulled out from direct sale strategy in 2007. The brand started selling
computers through outlets and retailers. Nowadays, Dell is the 2nad largest world’s retailers in
the computer industry.

Divestment Strategy
A large company that has attained many assets, departments, and product divisions analyzes
various divisions and departments’ profitability. Whether they’re contributing to the company’s
strategy, or they aren’t. If they aren’t achieving the required results, then you cut them loose.

In other words, divestment strategy means the sale of a portion of your business, asset, and
division. Companies apply divestment strategy when turnaround strategy has already failed.

Businesses and companies follow the divestment strategy for many reasons like merger plans,
creating resources, availability of alternative investment plans, tech up-gradation, persistent
issues, negative cash flows, and mismatched assets.

For instance, TATA Group of Companies has got a lot of businesses working under its umbrella.
They examine their business now and then; if they find any business out of the company’s core
ideology, they divest it.

TATA divested TOMCO and sold it to Hindustan Levers because it thought detergents and soaps
weren’t the company’s core business.

Liquidation Strategy
Liquidation strategy is the extreme level in the retrenchment strategy where you permanently
shut down the business and sell all of your assets. Liquidation is the final option of the problems
of any business because it has serious outcomes. It results in the form of saying no to every
potential opportunity and firing all the employees.
Small businesses usually liquidate. Large companies like suppliers, creditors, trade unions,
financial institutions, and government departments don’t liquidate.

For instance, online e-commerce is losing traffic on its store daily. The expenses are increasing
than the store’s total earning. The management has no other choice but to liquidate the store and
pay off the debt.

Reasons for Adopting Retrenchment Strategy

Businesses and companies follow the retrenchment strategy usually because of economic,
technological, and structural reasons. They’re as follows;

The economic reason is that the businesses follow the retrenchment strategy to raise funds to
start projects and operations.
Adopting the latest technology, electronic systems, computer package, equipment, and chemical
formula would lower the demand for more workforces.
The structural reason would require the management to move from a corporate functional
strategy to a project-based structure system by reducing the management levels.

Generic Competitive Strategies- Business Strategies

The organizations are operating with the intension of achieving a defined goal. To achieve this
goal, driving the organizational activities towards the success is majorly important. To identify
the growth opportunities Michael Porter‘s generic strategies can be used in any type of
organization.
In 1985, through his book “Competitive Advantage” Creating a Sustaining Superior
Performance’, Michael Porter’s Generic Strategies were introduced for the first time.
It is vital for any organization to evaluate their current business, identify and decide the products
they are going to consider producing in future to achieve maximum profit. This may include
discontinuing products, introducing new products or modifying existing products. This is a
necessary for any organization to achieve their targets efficiently and effectively, maintain the
expected status by the stakeholders and attract the best possible market share for the product or
service.

While maintaining all these, the organization’s portfolio also must grow and strategies should be
implemented using the available strengths and opportunities. Michael Porter’s Generic strategies
is a tool that can be used for identifying the direction of the organization.

In the Michael Porter’s Generic strategies, three main strategies are used as the base namely,
Cost leadership, Differentiation leadership and Focus. Later he divided the focus strategy in t two
sub categories namely Cost focus and Differentiation Focus.

According to Michael Porter, there are four generic strategies.

1. Cost Leadership
2. Differentiation
3. Cost Focus
4. Differentiation Focus
Cost Leadership
Under the Cost leadership strategy, the organization target for a broad, large scale market. They
provide the lowest possible prices to attract customers. The intension of this strategy is to reduce
the costs as much as possible. The organization can use two methods to become success using
cost leadership strategy. They can reduce the cost of the product as low as possible or they can
achieve a large market and keep the prices in average level. Both options will help the
organization to reduce the cost and to increase the income.

To implement one of these methods, the organization should have a substantial capital with them
and there should be a possibility in reducing the material, labour and production costs. This can
be achievable in the process up to a certain extend only. The organization should be thoroughly
aware when to stop the cost reduction process.

Differentiation
Under the Differentiation strategy, the organization is targeting a broad, large range of market
but provide a product with unique features. The organization has to create the product in a very
unique way in which the product can achieve competitive advantage in the industry. They should
concentrate on attracting the customers through the unique features of the product and to increase
the market share by that. This helps the organization to face the rivalry competition successfully
in maximizing the profits. However, the organizations who are using the differentiation strategy
in Michael Porter’s generic strategies, have to invest a lot on the Research and development,
innovation and creativity techniques.

Apart from that, the right way of marketing is vital for this kind of products as they are targeting
a large scale of market. They should continuously improve the product qualities and should be
flexible to the environmental changes.

Cost Focus
When the organization is implementing the cost focus strategy, they are aiming a niche market
with a little competition. This is more a focused market segment and the product will be
provided to the market with the lowest possible price. It is important for the organization to
choose the niche market correctly and provide to the market. That will create repeat customers
and the products cost will remain low.
Differentiation Focus
When an organization is providing its product to the market using the differentiation focus, they
select a niche market and provide a unique product to that market. This involves a
powerful brand loyalty of the customers to the product. It is highly important to make sure the
product features remain unique as the customer loyalty is based on the uniqueness of the product.

Foreign Market Entry Modes – Five Modes of Foreign Market Entry

In this section, we will explore the traditional international-expansion entry modes. Beyond
importing, international expansion is achieved through exporting, licensing arrangements,
partnering and strategic alliances, acquisitions, and establishing new, wholly owned subsidiaries,
also known as greenfield ventures.

Type of Entry Advantages Disadvantages

Low control, low local knowledge,

Exporting Fast entry, low risk potential negative environmental
impact of transportation

Less control, licensee may become a

Licensing and competitor, legal and regulatory
Fast entry, low cost, low risk
Franchising environment (IP and contract law)
must be sound

Shared costs reduce Higher cost than exporting, licensing,

Partnering and
investment needed, reduced or franchising; integration problems
Strategic Alliance
risk, seen as local entity between two corporate cultures

Fast entry; known, established High cost, integration issues with

Acquisition
operations home office

Greenfield Venture Gain local market knowledge;

(Launch of a new, can be seen as insider who High cost, high risk due to unknowns,
wholly owned employs locals; maximum slow entry due to setup time
subsidiary) control

Exporting

Exporting is a typically the easiest way to enter an international market, and therefore most firms
begin their international expansion using this model of entry. Exporting is the sale of products
and services in foreign countries that are sourced from the home country. The advantage of this
mode of entry is that firms avoid the expense of establishing operations in the new country.
Firms must, however, have a way to distribute and market their products in the new country,
which they typically do through contractual agreements with a local company or distributor.
When exporting, the firm must give thought to labeling, packaging, and pricing the offering
appropriately for the market. In terms of marketing and promotion, the firm will need to let
potential buyers know of its offerings, be it through advertising, trade shows, or a local sales
force.

Among the disadvantages of exporting are the costs of transporting goods to the country, which
can be high and can have a negative impact on the environment. In addition, some countries
impose tariffs on incoming goods, which will impact the firm’s profits. In addition, firms that
market and distribute products through a contractual agreement have less control over those
operations and, naturally, must pay their distribution partner a fee for those services.

Because the cost of exporting is lower than that of the other entry modes, entrepreneurs and
small businesses are most likely to use exporting as a way to get their products into markets
around the globe. Even with exporting, firms still face the challenges of currency exchange rates.

Licensing and Franchising

A company that wants to get into an international market quickly while taking only limited
financial and legal risks might consider licensing agreements with foreign companies.
An international licensing agreement allows a foreign company (the licensee) to sell the products
of a producer (the licensor) or to use its intellectual property (such as patents, trademarks,
copyrights) in exchange for royalty fees. Here’s how it works: You own a company in the United
States that sells coffee-flavored popcorn. You’re sure that your product would be a big hit in
Japan, but you don’t have the resources to set up a factory or sales office in that country. You
can’t make the popcorn here and ship it to Japan because it would get stale. So you enter into a
licensing agreement with a Japanese company that allows your licensee to manufacture coffee-
flavored popcorn using your special process and to sell it in Japan under your brand name. In
exchange, the Japanese licensee would pay you a royalty fee.

Licensing essentially permits a company in the target country to use the property of the licensor.
Such property is usually intangible, such as trademarks, patents, and production techniques. The
licensee pays a fee in exchange for the rights to use the intangible property and possibly for
technical assistance as well.

Because little investment on the part of the licensor is required, licensing has the potential to
provide a very large return on investment. However, because the licensee produces and markets
the product, potential returns from manufacturing and marketing activities may be lost. Thus,
licensing reduces cost and involves limited risk. However, it does not mitigate the substantial
disadvantages associated with operating from a distance. As a rule, licensing strategies inhibit
control and produce only moderate returns.

Another popular way to expand overseas is to sell franchises. Under

an international franchise agreement, a company (the franchiser) grants a foreign company
(the franchisee) the right to use its brand name and to sell its products or services. The franchisee
is responsible for all operations but agrees to operate according to a business model established
by the franchiser. In turn, the franchiser usually provides advertising, training, and new-product
assistance. Franchising is a natural form of global expansion for companies that operate
domestically according to a franchise model, including restaurant chains, such as McDonald’s
and Kentucky Fried Chicken, and hotel chains, such as Holiday Inn and Best Western.

Contract Manufacturing and Outsourcing

Because of high domestic labor costs, many U.S. companies manufacture their products in
countries where labor costs are lower. This arrangement is
called international contract manufacturing or outsourcing. A U.S. company might contract with
a local company in a foreign country to manufacture one of its products. It will, however, retain
control of product design and development and put its own label on the finished product.
Contract manufacturing is quite common in the U.S. apparel business, with most American
brands being made in a number of Asian countries, including China, Vietnam, Indonesia, and
India.[4]

Turnkey Projects
Turnkey refers to something that is ready for immediate use, generally used in the sale or supply
of goods or services. The word is a reference to the fact that the customer, upon receiving the
product, just needs to turn the ignition key to make it operational, or that the key just needs to be
turned over to the customer. Turnkey is commonly used in the construction industry, for instance,
in which it refers to bundling of materials and labour by the home builder or general contractor
to complete the home without owner involvement. The word is often used to describe a home
built on the developer's land with the developer's financing ready for the customer to move in. If
a contractor builds a "turnkey home" it frames the structure and finish the interior; everything is
completed down to the cabinets and carpet. Turnkey is also commonly used in motorsports to
describe a car being sold with powertrain (engine, transmission, etc.) to contrast with a vehicle
sold without one so that other components may be re-used.
Similarly, this term may be used to advertise the sale of an established business, including all the
equipment necessary to run it, or by a business-to-business supplier providing complete packages
for business start-up. An example would be the creation of a "turnkey hospital" which would be
building a complete medical Centre with installed medical equipment.

Multi-domestic and growth Strategies

When a company expands internationally, there are a few different ways to connect with those
new markets. Many companies use multi-domestic strategies to appeal directly to the local
market. If you're in marketing, learning more about multi-domestic strategy can help you
determine if it's a good technique for you. In this article, we discuss what multi-domestic strategy
is, explore benefits and examples of using it and compare multi-domestic strategy and global
strategy.
What is a multi-domestic strategy?

A multi-domestic strategy is a marketing approach where a company focuses on customizing

advertising and commercial efforts to local markets. The company might introduce a new brand
for each region, adjusting marketing, packaging, services and sometimes product lines to match
local preferences, norms and customs. For example, a multi-domestic beverage company could
release unique drink flavors in different regions. Websites also undergo localization, using local
languages and often featuring residents of the region.

Companies typically conduct extensive research before entering a new market and may adapt
many aspects of its business operations to suit the local market. When starting in the new region,
the company sets up regional operations that may include management, customer support,
storefronts, offices and manufacturing facilities. The amount of independence under which a
regional unit operates often depends on the parent company.

What are the benefits of using a multi-domestic strategy?

Businesses that use a multi-domestic strategy often receive many benefits:

• Connect directly with the local market

Businesses that invest in localization for the region they wish to enter are often able to match the
local product-market fit more successfully and achieve a deeper market connection. Local
populations may recognize the effort the company makes to meet the cultural expectations and
preferences of the area and often may accept the new business more readily. By adapting
marketing, branding and product options, a company can increase their appeal to local markets
and may increase their potential profits in the future.

• Maximize local responsiveness

Using a multi-domestic strategy, companies functionally form new businesses in each region of
operation. The parent company may decentralize the decision-making process, giving some
authority to each regional unit of the company. This can allow these units to make decisions that
align with regional practices without waiting for a corporate decision or policy change to affect
changes for the entire company.

• Compare domestic and regional markets

A company that recognizes the regional differences between markets can compare the success of
each unit with domestic markets. This may allow the parent company to make improvements or
investments according to trends they observe in each regional unit. The parent company might
also use these observations to evaluate which regions prove successful versus which regions they
might scale down in the future or to identify effective localization strategies they might consider
implementing elsewhere.
 • Work with local resources

When a company establishes operations in a new locale, they have the ability to use local
resources. This might include the local workforce, shipping lanes and natural resources. The
company might also hire a local marketing agency to assist with the localization process by
making ads, holding focus groups or revising packaging. To integrate local brands into the parent
company, the company might consider making mergers and acquisitions.

Multi-domestic vs. global strategy

When using a multi-domestic strategy, a brand splits into several regional iterations. Residents
from one market might have different ideas about the company from residents in a separate
market. The company fits all of its commercial efforts in each region to the needs and
conventions of that region. This allows the company to work with the particular nuances of each
region to help improve sales and increase appeal in different global markets.

A global strategy functions opposite a multi-domestic strategy. Companies using a global

strategy present a unified branding style everywhere, with fewer variations in marketing or
products from region to region. This helps build brand awareness. Promoting a standardized
product through global strategy also helps companies scale economies reduce costs by buying
resources on a massive scale. Since a global strategy maintains a high degree of standardization
across all markets, the company can operate using a highly centralized management structure to
coordinate brand strategy in many regions.