Question

When McDonald's started customizing its product offerings to suit differing regional tastes, such as offering vegetarian products in India, this represented what type of strategy change?
(A) Localization strategy
(B) Transnational Strategy
(C) Global mandate
(D) Global standardization strategy

Answer 1

Answer:

The correct answer is (A) Localization strategy

Explanation:

It is one of the most important strategic decisions that companies make. Localization can also influence other costs such as taxes, wages, raw materials and income. Companies make location decisions infrequently, usually because demand has exceeded the current capacity of the plant or due to changes in labor productivity, exchange rate, costs or local attitudes. Companies also relocate their manufacturing facilities or services due to demographic changes or consumer demand. Location alternatives include (1) expanding an existing installation instead of moving it; (2) maintain the current sites while opening facilities somewhere else, or (3) close existing facilities and move to a new location.

The location decision often depends on the type of business. For industrial location decisions, the usual strategy is to minimize costs, although innovation and creativity can also be critical. For retail organizations or professional services, the strategy focuses on maximizing revenue. However, the warehouse location strategy can be guided by a combination of costs and speed of delivery. The objective of the location strategy is to maximize the benefit of the location for the company.