Internationalization and Supply Chain Strategies

In the following the different international production strategies are explained. 

These production strategies can be used to align the overall supply chain strategies. 

Description Centralized production and shipment to the markets Combination of centralized, decentralized and excentralized production into a global network Decentralized production situated in the respective host markets 

Main objectives Cost-efficlencles (through size effects) Cost-efficiencies and responsiveness (through mass customization/ Postponement) Responsiveness to customer demands (through product differentiation) 

On the other hand, if a multi-domestic strategy (formerly termed host-market production) is implemented, the emphasis is put on the customer normally, the peculiarities of the distinct markets and their customers demands require an increased product differentiation and therefore a higher degree of responsiveness and flexibility, which results in an agile supply chain strategy. In addition, the smaller product quantities do not allow for large-scale, cost-efficient production. 

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