Ways Multinational Enterprises (MNEs) Adapt their Product for Sale in Overseas Markets

Ways in which Multinational Enterprises (MNEs) Need to Adapt their Product for Sale in Overseas Markets
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Ways in which Multinational Enterprises (MNEs) Need to Adapt their Product for Sale in Overseas Markets
Multinational enterprises (MNEs) operate on a global level to serve the needs of consumers in different countries. When operating globally, MNEs must understand that their overseas markets may differ from their domestic ones. As such, multinationals must develop different sales strategies and adapt their products to ensure they succeed in overseas markets. According to Zhang et al. (2019), MNEs face the pressure of either local responsiveness or global integration, and as a result, they develop capabilities to help them address this pressure. This means that MNEs can adapt by either modifying their products to meet the needs of overseas countries or by using the same products in both domestic and overseas markets. The important thing to note is that the success of MNEs in overseas markets is highly dependent on how they adapt to meet the needs of the markets. They need to consider factors such as the demand for products as well as overseas research and development (R&D) when adapting their products for sale in overseas markets.
Background: The Variability and Complexity of Overseas Markets
Overseas markets are characterized by cross-border complexities that MNEs must constantly address if they want to remain operational in such markets. When operating in overseas markets, MNEs have to navigate through problems presented by variations in the institutional, social, political, and economic contexts of different local markets. According to Shapoval (2019), when MNEs are venturing into overseas markets, they have to consider factors such as trade and investment barriers, the political context, property rights regimes, and commodity market dependence in various local markets. These factors are influential to any MNE looking to pursue opportunities in external markets and must be considered. In addition, the global competitive environment is highly driven by technological advancements and innovation, and MNEs operating in overseas markets have to establish ways in which they can use their technology or acquire new technology to respond to the needs of diverse overseas markets. According to Pearce and Papanastassiou (1999), MNEs serve different local markets with different needs and different manufacturing conditions, and these differences are a source of complexity for many MNEs. As such, MNEs must implement a technological strategy that allows them to position themselves competitively in the global market. Also, developing such a technological strategy is one of the complexities faced by MNEs.
To address these challenges and remain competitive in a global business environment, MNEs have adapted mainly through innovation and R&D. Pearce and Papanastassiou (1999) reveal that R&D is an essential aspect of the success of MNEs. Overseas R&D allows MNEs to address complexities in overseas markets. For instance, locally integrated laboratories allow MNEs to develop new products that will more effectively meet the hos...