Download 2. Global Strategy

Global Marketing Management
Chapter 8
Global Marketing
Strategies
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Chapter Overview
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2.
3.
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5.
6.
Information Technology and Global Competition
Global Strategy
Global Marketing Strategy
R&D, Operations, Marketing Interfaces
Regionalization of Global Marketing Strategy
Competitive Analysis
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Introduction
• On a political map, country borders are clear as ever.
But on a competitive map, financial, trading, and
industrial activities across national boundaries have
rendered those political borders increasingly
irrelevant.
• Not only firms that compete internationally but also
those whose primary market is considered domestic
will be affected by competition from around the
world.
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1.
Information Technology and
Global Competition
• Today, we are observing the emergence of a gross
information product, and it dwarfs the gross domestic
product.
• Electronic Commerce (e-Commerce)
• e-Company
• Faster Product Diffusion
• Global Citizenship
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2. Global Strategy
•
Global strategy consists of five
conceptualizations:
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4.
5.
Global industry
Competitive industry
Competitive advantage
Hypercompetition
Interdependency
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2. Global Strategy
• Global Industry:
– Those industries where a firm’s competitive
position in one country is affected by its
position in other countries.
– The first question that faces managers is the
extent of globalization of their industry.
– Every industry has global or potentially global
aspects.
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2. Global Strategy
• Industry Globalization Forces (Exhibit 8-1):
Four forces interact to determine the potential of
industry globalization.
1. Market forces
2. Cost forces
3. Government forces
4. Competition forces
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Exhibit 8-1: Industry Globalization
Drivers
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2. Global Strategy
Market Forces
1. Per capita income convergence
2. Rich consumers in emerging markets
3. Revolution in communication technology
4. Organizations behaving as global customers
5. Growth of global and regional channels
6. Establishment of world brands
7. Spread of global and regional media
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2. Global Strategy
– Cost Forces
1. Global economies of scale and scope
2. Steep experience curve
3. Global sourcing efficiencies
4. Favorable logistics
5. Difference in country costs
6. High product development costs
7. Fast-changing technology
8. Shorter product life cycles
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2. Global Strategy
–
–
Government Forces
1. Favorable trade policies
2. Compatible technical standards
3. World Trading Regulations
4. High growth/low labor cost developing countries
5. Deregulation/privatization of industries
Competitive Forces
1. High exports and imports
2. Competitors from different continents and
countries
3. Interdependent countries
4. Globalized competitors
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2. Global Strategy
• Competitive Structure
– Cost leadership
– Product differentiation
– Niche strategy
– Nature of Competitive Industry Structure (Exhibit 8-2):
»Industry competitors
»Potential entrants
»Bargaining power of suppliers
»Bargaining power of buyers
»Threats of substitute products or services
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Exhibit 8-2: Nature of Competitive
Industry Structure
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2. Global Strategy
•
Gaining Competitive Advantage
– Creative destruction
– First-mover advantage versus first-mover
disadvantage
– Competitor-focused approach
– Customer-focused approach
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2. Global Strategy
• Interdependency:
– Interdependency of modern companies
– Example: Global computer industry
– Governments also play a larger role, affecting parts
of the firm’s strategy.
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3. Global Marketing Strategy
• Benefits of Global Marketing:
– Cost Reduction
– Improved Products and Program Effectiveness
– Enhanced Customer Preference
– Increased Competitive Advantage
• Limits to Global Marketing:
– Standardization vs. adaptation issues
– Globalization vs. localization
– Global integration vs. local responsiveness
– Scale vs. sensitivity
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3. Global Marketing Strategy
• Not every element need be standardized to the same
degree (Exhibit 8-3)
• Degree of product standardization varies widely
based on many factors (Exhibit 8-4)
Exhibit 8-3: Variation in Content and
Coverage of Global Marketing
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Exhibit 8-4: Degree of Standardizability of
Products in World Markets
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4. R&D, Operations and Marketing
Interfaces
• R&D/Operations Interface
• Operations/Marketing Interface
– Core Components Standardization
– Product Design Families
– Universal Products with all Features
– Universal Product with Different Positioning
• Marketing/R&D Interface
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Exhibit 8-5: Interfaces among R&D,
Manufacturing, and Marketing
Please Insert Exhibit 8-5 Here
“Interfaces among R&D, Manufacturing, and
Marketing”
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5. Regionalization of Global
Marketing Strategy
• Regional strategies are the cross-subsidization of
market share battles in pursuit of regional production,
branding, and distribution advantages.
– Issues in regionalization of global marketing
strategy:
• Cross-Subsidization of Markets
• Identification of Weak Market Segments
• Use of “Lead Market” Concept
• Marketing Strategies for Emerging Markets
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6. Competitive Analysis
• SWOT (Strengths, Weaknesses, Opportunities, and
Threats) Analysis (See Exhibit 8-6.)
– A SWOT analysis divides the information into two
main categories: internal and external factors.
– Based on SWOT analysis, marketing executives can
construct alternative strategies.
– The aim of any SWOT analysis should be to isolate
the key issues that will be important to the future of
the firm and that will be addressed by subsequent
marketing strategy.
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Exhibit 8-6: SWOT Analysis
Please Insert Exhibit 8-6 Here
“SWOT Analysis”
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