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EPRG Orientation
Douglas Wind and Pelmutter advocated four approaches to international business: the ethnocentric approach, polycentric approach, regiocentric approach, and geocentric approach. The ethnocentric approach involves exporting the same products designed for the domestic market to foreign countries. The polycentric approach decentralizes decision-making to foreign executives. The regiocentric approach markets similar products designed for a region to neighboring countries. The geocentric approach operates subsidiaries globally as independent companies coordinated by the headquarters.
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Introduction to EPRG model by Wind and Pelmutter outlining four international business approaches.
Focus on domestic markets; export strategies and products tailored for the home market, managed by domestic personnel.
Decentralization of operations with local decision-making. Local preferences and environment shape policies and product designs.
Companies expand operations regionally, considering regional cultures and policies while adapting strategies and products.
Global perspective where subsidiaries operate independently, yet all functions are coordinated from headquarters.
Conclusion and invitation for further inquiries via email or comments.
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EPRG Orientation
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- 2. Douglas Wind andPelmutter advocated four approaches of international business. They are: E th n o c e n tric A p p ro a c h P o ly c e n tric A p p ro a c h R e g io c e n tric A p p ro a c h G e o c e n tric A p p ro a c h 2
- 3. ETHNOCENTRIC APPROACH The domesticcompanies normally formulate their strategies, their product design and their operations towards the national markets, customers and competitors Export the excessive production to foreign countries Views the foreign markets as an extension to the domestic markets Exports the same product designed for domestic markets to foreign countries Domestic Personnel take care of foreign business 3
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- 5. POLYCENTRIC APPROACH 5 The companyestablishes a foreign subsidiary company and decentralizes all the operations and decision making to their foreign executives. Company appoints the key personnel from the home country and all other vacancies are filled by the people of the host country The executives of the subsidiary formulate the policies and strategies, design the product based on the host country's environment (culture, customs, laws, government policies etc.) and the preferences of the local customers.
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- 7. REGIOCENTRIC APPROACH Thecompany after operating successfully in a foreign country, thinks of exporting to the neighbouring countries of the host country. The foreign subsidiary considers the regional environment (for example, Asian environment like laws, culture, policies etc.) for formulating policies and strategies. Markets more or less the same product designed under polycentric approach in other countries of the region, but with different market strategies 7
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- 9. GEOCENTRIC APPROACH Theentire world is just like a single country for the company. They select the employees from the entire globe and operate with a number of subsidiaries. The headquarters coordinate the activities of the subsidiaries. Each subsidiary functions like an independent and autonomous company in formulating policies, strategies, product design, human resource policies, operations 9
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- 11. THANK YOU !!! Writeto me at [email protected] or comment in the comment box