Compare the strategic advantages of a long established multi-domestic organization to a newly established regionally oriented firm in the EU.

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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The major advantage of the established, multi-domestic firm is that it is a known "brand" in each of the domestic markets in which it participates.  People in all of the countries involved know that the firm is to some degree "local" because it has a separate organization in each country.  They know that the firm tailors its products and strategies to that particular country.  For these reasons, the firm may well have a solid level of customer loyalty within each country.

By contrast, the advantages of the newly-established firm are built on costs and efficiency.  This firm does not have to pay for the duplicate expenses of head offices in each country or different advertising campaigns for each country.  The firm does not have to expend time and resources on creating variations on its product for each market.  This firm is very likely to be able to offer its product at lower prices because of these efficiencies.

The new firm will probably have lower prices, but the older firm will be likely to have developed a loyal customer base.

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