20. A multinational corporation (MNC) is headquartered in the United States, has offices in Africa, and has executive leaders who believe in centralized decision-making. The MNC wants to increase its product purchases in diverse markets to compete with African companies that create made-to-order products. Which strategy should the executive leadership use to increase purchases?
Answer: A
Increasing local market responsiveness
To effectively compete with African companies that offer made-to-order products, the MNC should focus on increasing local market responsiveness. This strategy will allow the corporation to better understand and cater to the specific needs and preferences of diverse markets.
A) Increasing local market responsiveness
This option is correct as it emphasizes the need for the MNC to adapt its products and services to meet the unique demands of local consumers. By being responsive to local tastes, preferences, and cultural nuances, the MNC can enhance its competitiveness against local firms that are already tailored to their markets.
B) Expanding standardized production
Choosing to expand standardized production would not address the specific needs of local markets. This approach may lead to a one-size-fits-all product offering, which could be less appealing to consumers who prefer customized solutions. Therefore, this option is not suitable for competing effectively in diverse markets.
C) Expanding the number of product lines
While expanding product lines can provide variety, it does not inherently ensure that the new products will resonate with local customers. Without a focus on local market responsiveness, this strategy may lead to products that do not meet the specific demands of those markets, thus failing to increase purchases effectively.
D) Increasing supply chain integration
Increasing supply chain integration could enhance efficiency and reduce costs, but it does not directly address the need for local market adaptability. This strategy might streamline operations but would not necessarily lead to increased purchases in diverse markets where local preferences are crucial.
Conclusion
Increasing local market responsiveness is essential for the MNC to successfully compete against local companies offering tailored products. The other options, while potentially beneficial in different contexts, do not adequately address the need for adaptability to local consumer demands, which is key to enhancing market presence and increasing purchases in diverse regions.