39. In which situation is the contender strategy appropriate for responding to MNEs?
Answer: D
The contender strategy is appropriate when there is high industry pressure to globalize, and competitive assets are transferable abroad.
The contender strategy is particularly effective in scenarios where firms face significant globalization pressures while possessing competitive assets that can be effectively utilized in foreign markets. This allows companies to leverage their strengths internationally while addressing the competitive forces that compel them to expand.
A) There is low industry pressure to globalize, and competitive assets are transferable abroad.
This option is incorrect because while competitive assets being transferable is advantageous, the low industry pressure to globalize does not necessitate the application of a contender strategy. The strategy is designed for environments where firms must actively respond to globalization pressures.
B) There is high industry pressure to globalize, and competitive assets are customized to home markets.
This option fails as the customization of competitive assets to home markets limits the firm's ability to effectively compete internationally. The contender strategy requires assets that can be transferred and adapted to diverse global contexts, which this scenario does not provide.
C) There is low industry pressure to globalize, and competitive assets are customized to home markets.
This choice is incorrect as both low industry pressure to globalize and the customization of competitive assets to home markets suggest a lack of urgency or capability for international expansion. The contender strategy is not suitable under these circumstances.
D) There is high industry pressure to globalize, and competitive assets are transferable abroad.
This option is correct as it aligns with the essence of the contender strategy. High industry pressure to globalize necessitates a proactive response, and having transferable competitive assets enables firms to enter and thrive in international markets effectively.
Conclusion
The contender strategy is best suited for environments characterized by high industry globalization pressures combined with transferable competitive assets, allowing firms to optimize their strengths on a global scale. Other options fail to meet both criteria essential for the effective implementation of this strategy, either due to insufficient pressure or unsuitable asset conditions.