Certified Production & Operations Manager (POM) Practice Exam

Which of the international operations strategies uses import/export or licensing of existing products?

1. Transnational Strategy

2. Global Strategy

3. International Strategy

4. Multidomestic Strategy

The correct answer is: International Strategy

The international operations strategy that prominently uses import/export or licensing of existing products is the International Strategy. This approach is characterized by leveraging existing products or services from the home country in foreign markets to capitalize on unique advantages without substantial investment in local production facilities. In this strategy, companies often focus on their existing markets and products while entering new international markets through simple arrangements like exportation or licensing agreements. This allows organizations to gain a foothold in new regions with minimal risk, as they do not need to set up extensive operations abroad. The primary goal is to extend the reach of current offerings by using established processes and products rather than developing new ones specifically for each market. The other strategies differ in their execution and intent. A transnational strategy aims for greater integration of global operations while adapting to local markets. A global strategy emphasizes efficiency and a standardized approach across markets, seeking to maximize economies of scale. Meanwhile, a multidomestic strategy tailors products and services to specific local markets, requiring more localization than the international strategy. Thus, the emphasis on utilizing existing products with flexible entry methods makes the International Strategy the appropriate choice in this context.