What is the EPRG Framework? 4 stages of the EPRG Framework

Wind, Douglas, and Perlmutter created and presented the EPRG Framework. It concentrated on the company’s foreign marketing activities and the disparate perspectives about its engagement in international marketing procedures and surroundings.

Anatomy of EPRG Framework

1. The framework discusses how strategic decisions are made within the firm and how relationships are formed and maintained between its headquarters and subsidiaries.
2. The way a company and its employees see the world is defined as international management orientations, but Perlmutter discovered an alternate way to identify these orientations referenced in the EPRG Framework.
3. It consists of four stages in the evolution process of international operations, and the framework claims that the business and its employees typically function in one of the four ways described.

The four stages of the EPRG Framework

1. Ethnocentric Orientation

Companies adopting or functioning in this style believe their native country is superior; therefore, they seek commonalities when looking for international prospects. These corporations rarely adapt their products to the tastes and needs of the new market they are serving and do minimal foreign market research.

The flagship office is prioritized over subsidiaries and offices worldwide. Domestic enterprises neglect promising chances abroad.

These ethnocentric corporations believe that superior items that are popular in the home country may be offered in international markets without adaptation. Product characteristics, price, advertising, and other factors remain the same in global markets as in the original market.

Subsidiary enterprises in foreign markets must obey the rules of their foreign country headquarters. The home country’s senior management believes they can better oversee overseas processes and operations than subsidiary staff.

The advantages of the ethnocentric approach are as follows:

• Streamlined inter-office alignment and integrated control
• Homegrown corporate culture is seamlessly propagated abroad.
• Direct supervision and governance from headquarters over foreign entities.

One of the major disadvantages of this mindset is that it showcases the company’s cultural shortsightedness.

2. Polycentric Orientation

Companies that follow the polycentric approach view each country’s domestic market as distinct and exclusive and believe enterprises are best operated locally in worldwide marketplaces. The headquarters has limited control over the activity of its subsidiary markets, and there is a minimal endeavor to make good use of ideas and methods prevalent in other markets.

This method lays a solid foundation for each subsidiary to build its own marketing and business strategies for success. The country’s local and international markets are also given equal attention. This technique is best suited for countries that face certain financial, political, and cultural constraints.

Because there is no need to move talented workers to other nations to preserve the element of centralization, this method is less expensive than the ethnocentric one. However, one consequence of this method is that it can limit the career mobility of both local and foreign nationals working for the company and lower the likelihood of synergy within the organization.

The advantages of the Polycentric approach are:

• Polycentric techniques help to alleviate the obstacles of expatriate assimilation.
• Employing host country nationals lowers costs while increasing local employee morale.
• Improved market insights correspond with greater productivity, expanding host country residents’ employment opportunities.
• Promotes positive local government connections.

3. Regiocentric Orientation

The company that uses the framework’s Regiocentric approach investigates the similarities and contrasts in the world and its many operational zones and then creates its strategy appropriately. The company’s management determines the economic, social, cultural, and political parallels between the native area and the overseas location and then meets the same wants and demands of potential clients.

India, Pakistan, and Bangladesh share a cultural and geographical identity, although Norway and Spain, both in Europe, differ significantly in terms of culture, climate, and transportation, among other factors.

The advantages of regiocentric approach are as follows:

• Businesses that hire management professionals from the same region as their operations base will automatically align with local cultural norms and linguistic nuances.
• Managers who understand regional market dynamics perform better across nations in the same geographical cluster.
• Empowering local nationals in decision-making positions provides a distinct viewpoint on global strategy design.

4. Geocentric Orientation

Companies that adopt the EPRG Framework’s Geocentric approach are true global participants because they embody the act and strategy of “think global, act local.” They see the entire world as a potential market and take effective and efficient measures to meet the needs and desires of their clients. They notice the distinctions and similarities between their home country and foreign markets, and they combine their ethnocentric and polycentric perspectives to develop a substantial strategy for success. Their global strategy is perfectly tailored to the demands and desires of local clients, boosting global marketing.

The geocentric approach does not correlate country with superiority, and the corporation strives to sell the greatest human resources to solve global problems within the constraints of legal and political factors. This ensures the effective and efficient use of human resources by fostering a global mindset, strong culture and informal management channels that facilitate the seamless flow of work activities.

This technique attempts to strike a compromise between global integration and local response, but it has one major downside. National immigration rules and policies may limit its adoption, and this method is more expensive than polycentrism.

The advantages of geocentric orientation are as follows:

• The geocentric perspective helps to establish a stockpile of executives with worldwide exposure and international networks, allowing the firm to leverage varied managerial skills to achieve its overall goals.
• This technique can reduce feelings of injustice and promote a more amicable workplace environment.
• Employees in a geocentric organization can broaden their skills and knowledge by learning from their colleagues’ diverse experiences.

Merits, demerits, an example of Ethnocentric Orientation of the EPRG Framework

Merits of EPRG Framework

• It is less expensive as no costs or efforts are required to adapt the product.
• Easy route to explore international markets with similar domestic features

Demerits of the EPRG Framework

• No optimum exploitation of international human resource opportunities
• The main focus is always on the domestic market

Examples of EPRG Framework

Ethnocentric Example – Nissan

Nissan’s ethnocentric approach was quite visible in its initial years, as the cars and trucks exported to the USA were difficult to start during the cold winter months. In Japan, car owners would cover their cars with hoods or blankets during winter and expect Americans to do the same.

Regiocentric Example – McDonald’s

In the country of India, McDonald’s’ serves burgers without pork and beef, keeping in mind the religious sentiments of the local citizens

Example of Geocentric Orientation of the EPRG Framework :

1. M TV

M TV caters to the local tastes of India, China, and South Korea, broadcasting channels with Hindi Pop in India and Chinese music in China.

2. McDonald’s

McDonald’s offers beer in Germany and wine in France

Conclusion

The EPRG Framework defines four strategic orientations for international marketing: ethnocentric, polycentric, regiocentric, and geocentric. Each orientation represents a company’s approach to worldwide business operations. This paradigm depicts the transition from a domestic focus to global integration by prioritizing home-country practices and accepting global synergies with local modifications. It emphasizes the need to understand local markets and cultural sensitivities in directing businesses toward more effective international engagement.

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