Adaptation Strategy

Adaptation is invoked by a multinational company that seeks, for example, to expand a business unit horizontally across countries.

An example is MTV, which has created sister stations across much of Europe and Asia.

Before setting up shop in a foreign country, management needs to comprehend the elements of the home-market activity set that have been essential to the company’s success Adaptation is invoked by a multinational company that seeks, for example, to expand a business unit horizontally across countries.

An example is MTV, which has created sister stations across much of Europe and Asia.

Before setting up shop in a foreign country, management needs to comprehend the elements of the home-market activity set that have been essential to the company’s success Some countries make it prohibitive to enter their markets, if not through outright protectionism, then at least through product and labor regulations, antitrust enforcement, zoning laws, and other policies

In the current era of globalization, it is usually possible to transplant the central elements of a company’s strategy.

But the culture and institutions of foreign host countries might dictate that other important elements of a company’s strategy be tailored to the local market.

For example, multinational companies might have an advantage in recombining local products and services with home-country output, to produce ever more novel and value-creating products

Multinationals might also establish internal norms and processes for adapting useful innovations originated in one host-country subsidiary to all sufficiently similar markets.

Lastly, in foreign host markets that lack essential institutions for market development, multinationals might be able to substitute, for example, as guarantors for transactions