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CS Professional · Strategic Management and Corporate Finance · Introduction to Strategic Management

An Indian IT services company is entering Southeast Asia. Its board finds that local regulations, culture and customer preferences differ widely across target countries. Which strategic challenge does this primarily illustrate?

This illustrates the challenge of balancing global integration with local responsiveness. Differences in regulation, culture and customer taste push the firm to adapt offerings locally, while efficiency favours standardisation. Backward integration, liquidation or domestic cost-plus pricing do not address this issue.

  1. ABalancing global integration with local responsiveness in international strategyCorrect
  2. BVertical integration backward into raw materials
  3. CRetrenchment through liquidation
  4. DCost-plus pricing within a single domestic market

Explanation

Differences in regulation, culture and customer preferences force a firm to choose between standardising globally for efficiency and adapting locally for fit. The other options concern unrelated strategic issues.

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