You're the head of internationalization at a consumer goods company in Santiago. You're about to enter several countries, and the board is split: one camp wants a single, global product —maximum scale—; the other wants to adapt everything to each country —maximum closeness—. But "global or local" is a false choice. Philips was too local and lost efficiency; IKEA arrived in the U.S. with its global concept intact and stumbled until it adapted beds and sofas. The answer is to be both at once.
The situation
The classic dilemma is global integration (standardizing to gain scale) versus local responsiveness (adapting to each country's tastes, regulation, and channels). Two opposing forces pull at once: economies of scale push toward the global; local differences push toward the local. Philips organized by country —highly responsive, but inefficient and slow—; Matsushita went global —efficient, but less sensitive—. Neither extreme won outright.
Here's the trap, in both directions. Being dogmatically global ignores real local needs: IKEA brought beds sized in centimeters and small sofas to the U.S., and Americans didn't buy until it adapted the assortment. Being dogmatically multi-domestic throws scale overboard: you reinvent the product in every country and carry costs a global rival doesn't have. The defensible answer is transnational: standardize what benefits from scale —the core concept, the brand, sourcing— and adapt what the local market truly demands —assortment, sizing, marketing—. Global where it pays off, local where it's needed.