What distinguishes a global industry from a multidomestic industry?

A global industry is characterized by competition that transcends national borders. This means that companies within a global industry operate on an international scale, engaging with various markets around the world and viewing competition as a broader entity that includes multiple countries. These companies typically offer products or services that are standardized across different regions, aiming to leverage economies of scale and integrate operations internationally to better compete.

In contrast, a multidomestic industry focuses more on local customer needs and preferences. In such industries, companies tailor their products and services to meet the specific demands of each national market, leading to segmented competition where firms primarily compete within their own country rather than on a global stage. This localized approach responds to the diverse market dynamics and consumer behaviors found in different regions.

The distinction highlighted reveals the strategic focus of companies operating within these two types of industries, with global industries emphasizing broader international competition and integrated strategies, while multidomestic industries prioritize domestic markets and localized adaptations.