The trinity of international strategy: Adaptation, standardization and transformation

The significance of context has not escaped the attention of international strategy theorists. In entering foreign markets, firms are assumed to possess two strategic choices: context adaptation and/or standardization. This implies that context is a given and management action is reduced to adapting or not. Both approaches downplay management's ability to transform context. To redress this, this article seeks to emphasize the significance of transformation strategy, which aims not to passively adapt to the foreign context or settle for a standardization strategy, but to transform the context in the image of home conditions. Adopting a social constructivist approach, the paper argues that the context and content of strategy are intrinsically linked. Rather than just adapting or not to the target context of the foreign market, it is suggested that the extension of strategy from one context to another entails or requires the transformation of that context. To illustrate this, the article discusses IKEA's extension of its own strategy into the Chinese context. The article closes with some implications for the theory and practice of international marketing strategy. Asian Business & Management (2010) 9, 47-65. doi:10.1057/abm.2009.22