How might foreign firms accomplish the shift from a multi-domestic to a regional strategy in the EU?
Hope this helps explain what I'm doing. Historicaly many foreign firms that competed in the European marketplace established an extensive network of highly autonomous local subsidiaries. However as Europe has evolved into a single market via the EU, those same firms have often been frusted in their efforts to shift from a multi domestic to a regional (European) strategy.
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This will differ to some extent with different product types. Any products that are likely to be subject to different tastes in different countries should probably be kept on a multi-domestic basis. Products where tastes are more homogeneous should be moved to a more regional strategy.
The best way to do this would be to gradually move towards more centralization. A firm could, for example, start to have a single advertising campaign for the whole EU. This would allow the firm to reduce advertising costs and ads could simply be translated into local languages. Eventually, the firm should centralize its management in one place. This would ensure that the upper levels of management, where the important decisions are made, would be more efficient. It would also reduce the problem of having multiple local subsidiaries with potentially conflicting strategies.
What must be done, though, is to be sure that adequate attention is paid to the differences in local culture that might make a regional strategy for some products a bad idea.
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