Meaning of Multidomestic Strategy
Multidomestic strategy is a strategy that attempts to maximise national responsiveness by using subsidiaries to respond to the local needs and conditions in different host countries of the company. It is a business approach in which a company operates in multiple countries as if each country were a separate and distinct market. This means that the company customizes its products, services, and marketing strategies to suit the specific needs and preferences of each country, rather than taking a standardized approach.
in other words, you can say that a multi-domestic strategy is a business approach in which a company decentralizes its operations and allows each of its subsidiaries or divisions in different countries to operate independently to tailor its products, services, and marketing to meet the specific needs of the local market.
The goal of a multi-domestic strategy is to maximize a company’s profitability in each market by tailoring its operations to the unique characteristics of each country. This often involves hiring local managers and employees, developing local supply chains, and establishing partnerships with local companies.
Example of Multidomestic Strategy
The main example of a multi-domestic strategy adopted by a company is Zee Channel offering different and customized programmes according to the places in which the channel operates. They do not focus on a standardized product or rather we can say a standard show or language but they offer a versatile range of programmes based on the market in which they are aired.
Another example of a company that adopts a multi-domestic strategy is McDonald’s. McDonald’s is a multinational fast-food restaurant chain that operates in more than 100 countries. By adapting its menu to local tastes, McDonald’s can attract and retain customers in different markets, which helps the company to maintain its global presence and market share. McDonald’s makes alterations to its menu depending on the country in which it operates. In India, McDonald’s offers burgers with high spice tolerance. They even offer a range of vegetarian options, including the McAloo Tikki burger, and a potato and pea patty sandwich. McDonald’s adjusts its marketing strategies to fit the local market. For example, in China, McDonald’s has a Chinese name and slogan, “I’m lovin’ it” is translated into Mandarin as “Wo ai baba” (I love it, Dad), which resonates better with Chinese culture. Similarly, in Japan, McDonald’s offers a “Teriyaki Burger” that is popular among Japanese consumers.
By allowing each subsidiary to adapt to the local market, McDonald’s can cater to the unique needs of each market while maintaining a consistent global brand. This approach has helped McDonald’s become one of the most successful fast-food chains globally.
Unilever is a consumer goods company that operates in over 190 countries. The product range is dynamic as they are diversified among food and beverage, personal care, home care, and refreshment. The eminent multi-domestic strategy adopted by them which is evident in the market is “Glow and Lovely”. In India, Unilever’s personal care brand, Glow & Lovely, is marketed as a skin-lightening cream, which is popular in the Indian market, while in the US, the same brand is marketed as a skin-brightening cream. Likewise, baby care products like Johnson & Johnson are popular only in India. Likewise in the food range, Unilever has localized it to suit regional tastes. For example, its ice cream brand, Wall’s, offers flavours like mango and kulfi in India, which are popular local flavours.
A multi-domestic strategy is a viable approach for companies that operate in multiple countries and wish to tailor their products, services, and marketing to meet the specific needs of each local market. The multi-domestic strategy offers companies an opportunity to maximize their growth potential by tapping into local markets and delivering products and services that meet their unique needs. This strategy also requires substantial investments in resources and coordination to ensure that the subsidiaries are working towards the company’s overall objectives.