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ACCA Strategic Professional · Strategic Business Leader · Strategic choices

Kestrel Pharma operates in several countries. Regulators in each require locally approved formulations and pricing, but Kestrel's R&D is costly and benefits from being pooled centrally. Using the pressures for global integration and local responsiveness, what does this situation suggest?

The situation suggests a transnational strategy. Pooled, costly R&D creates strong pressure for global integration, while differing national regulations on formulations and pricing create strong pressure for local responsiveness. With both pressures high, the firm must balance central efficiency and local adaptation.

  1. ALow integration and low responsiveness pressures, so an international (export) strategy suffices
  2. BHigh integration and low responsiveness pressures, so global standardisation
  3. CLow integration and high responsiveness pressures, so a pure multi-domestic strategy
  4. DHigh integration and high responsiveness pressures, so a transnational strategyCorrect

Explanation

Costly central R&D creates pressure for global integration, while local regulatory requirements create pressure for local responsiveness. Both are high, which points to a transnational approach. A pure multi-domestic strategy would ignore the R&D scale benefit.

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