Transcript International Marketing - University of Alaska system

International
Marketing
Perspectives & Paradigms
Borders Have Become Meaningless
& there’s no place to hide…
The entire
globe is
now tied
together as a
single
community
operating
24/7/365
Trans-National*
Cross-Cultural
High Speed/ Low
Cost
Transportation &
Communication
After more than a
century of electric
technology, we have
extended our central
nervous system in a
global embrace,
abolishing both space
& time”
-Marshall McLuhan,
Understanding Media- 1955
The Global Village Driver
The further & faster
people are able to
travel &
communicate…
the greater the
amount of interaction
& influence
Digital age
communication
technologies
Cable Television
Pay Television Services
Direct Broadcast Satellite [DBS]
MMDS and LMDS
Digital Television
Streaming Media
Digital Radio
Multimedia Computers and Video Games
The Internet and World Wide Web
Internet Commerce
Office Technologies
Virtual Reality
Home Video
Digital Audio
Distance Learning
Local and Long Distance Telephony
Wireless Telephony
Broadband Networks
Residential Gateways and Home Networks
Satellite Communications
source >> Future Technologies Inc. [www.fti.com]
Rise of the “Global Village”
… not just the
“shrinking” of time &
space
The new electronic
media have
transcended time &
space w/ “virtual
mobility”
Time, Mobility & Economic Growth
http://www.flexibility.co.uk/issues/trans
port/time-mobility.htm
Birth of the Global Village
25.000.000
25
20.000.000
COMPUTERS
HOSTS IN
INTERNET
(MILLONS)
20
15
10
5.000.000
5
4
130.000
0
1969
JUL.
1992
JUL.
1989
SEP.
1991
MAR.
JUL.
SEP. JUL.
1994
1995 1996 1997
OCT.
ENER.
ABR FEB.
NOV.
1993
1995
1996 1997
1997
Growth Global Data Exchange
Tbit/s
6
Data traffic
5
4
Total telephone traffic
International telephone traffic
97
98
99
0
1
2
3
4
5
6
7
Source: Arthur D. Little, 1999
8
The eEconomy projected to dominate GDP
of United States w/in 3 years
100%
New
“E”conomy
75
U.S.
GDP
50
25
Industrial
Economy
0
’72
’78
’84
’90
’96
’02
’08
The Global
Village
The Global
Economy
DismalScientist
One Big World Market:
The Global Economy
… the increasing
tendency of
economies around
the world to interact
w/ one another as one
market instead of
many national
markets
Along w/ collapse of Time & Space
…the collapse of Communism
the GLOBALIZATION OF
MARKETS AND ECONOMIES
accelerated by acceptance of free
enterprise/market system….
Other Drivers
of Evolution of Global Economy
• Gov’t Liberalization /
Deregulation
• Explosion in International Trade
Agreements / Regional Economic
Intergration
Economic Integration thru 130+
Trade Agreements Ranging From:
Economic Unions
Common Markets
Customs Unions
Free
Trade
Areas
Common External
Trade Policy
$ /Labor Mobility
Total PoliticalEconomic Integration
US Trade Agreements
World Market
Connections
INTERNATIONAL LINKAGES
Goods & Services
Trade Flows
Capital & Labor
Resource Flows
Information &Technology
Money
One Big World Market:
The Global Economy
The weekly volume of
international trade in
currencies
exceeds the annual value
of trade in goods &
services.
One Big World Market:
The Global Economy
• Daily international financial flows now
exceed $1.2 trillion.
• From 1990 to 2000, world GDP grew ~
30%
– Total world exports of merchandise &
services increased by 80 %.
• This year- World exports of goods &
services predicted to reach $11.4 trillion
(24% of world GDP).
World Bank
THE UNITED STATES & WORLD TRADE
Principal U.S. Exports & Imports
Exports
Amount
Chemicals
Semiconductors
Consumer Durables
Computers
Generating Equipment
Aircraft
Telecommunications
Automobiles
Grains
Nonferrous Metals
$49.8
42.3
40.1
38.6
27.6
26.7
22.2
20.5
14.4
12.2
Imports
Amount
Automobiles
$114.1
Petroleum
103.6
Computers
75.3
Household Appliances 66.4
Clothing
64.3
Chemicals
33.1
Consumer Electronics 32.8
Semiconductors
26.0
Telecommunications
23.2
Iron and Steel
17.7
THE UNITED STATES & WORLD TRADE
U.S. Exports & Imports of Goods
Exports to:
Industrial Countries
Developing Countries
Total
$38B
302
$683
Imports from:
Industrial Countries
Developing Countries
Total
$594B
573
$1167
THE UNITED STATES & WORLD TRADE
U.S. Exports & Imports of Goods
Imports
Exceed Exports By
Industrial
Countries
$381
Developing
Countries
$484
Billion (2002) 301
That’s over 9,680,000 Jobs at $50,000 $683
Each!
Total
Industrial Countries
$594
Developing Countries
573
Imports Exceeded Exports by
Total
$1167
$346 Billion in 1999
China
• In 2003, China accounted for
more than 60% of growth in
world trade
• Every week, more than $1
billion in FDI flows into China
•
~15%b annual growth in foreign trade
since 1978
•
2003 - world’s 4th largest exporter:
$438b after US, Germany and Japan
•
2003 - world’s 6th largest importer:
$412b
The Global
Village
The Global
Economy
The Global
Corporation
Evolution of MNC’s &
Management Strategies
• Multinational corporations
(MNCs)
Companies that maintain significant
operations in two or more countries
simultaneously but are based in one
home country
UN
databases
ACHIEVING GLOBAL SYNERGIES
LEVERAGING ASSETS
AND POSITION

Scale
Efficiencies

Coordination and
Integration

Transfer of Ideas,
Experience and
Know-how
STRATEGIC
FLEXIBILITY
Global
Strategy

Production
Shifting

Multiple
Sourcing

Transfer Pricing

Managing Cash
Flow
Multinational Corporations
•In 1970, of the 7,000 multinationals
identified by the United Nations,
more than 1/2 were from -- the
United States & Britain.
•By 1995, less than half of the
36,000 multinationals identified by
the United Nations came from four
countries: the United States, Japan,
Germany, and Switzerland.
Multinational Corporations
•At present, there are
65,000 MNCs* w/ 850,000
affiliates in foreign
countries
•MNCs’ total sales amount
to almost $19 trillion.
*The U.S. government defines a multinational corporations (MNC) …
as a company that owns or controls 10% .. of at least one foreign
business enterprise.
Multinational Corporations
•2/3s of world trade in goods
and services is controlled by
multinational companies.
•Of the 100 largest economies
in the world, 51 are
corporations.
•The sovereignty of nations will
perhaps continue to weaken due
to multinationals & increasing
integration of world economies.
Evolution of the International Firm
Exporter
Multi-National
Trans-National
Global
• Multinational corporations (MNCs)
Companies that maintain significant operations in
two or more countries simultaneously but are based
in one home country
• Transnational (TNC) corporation
A company that maintains significant operations in
more than one country simultaneously and
decentralizes decision making in each operation to
the local country
• Global corporations… take an integrated
approach across countries and regions and manage
for worldwide business leverage & competitive
advantage …
The Global Corporation
 Global
Vision
 Global Leverage
 Global Sourcing
Global Competitive
Moves
 Global Partnerships
The Global Corporation- A Global
Mindset
• Global Identity
• Single Corporate
Language
• Global Ethical Standards
• Multi-Country Careers
• Cross-Cultural Training
• Cross National
employment .. especially
management at all levels
The Global
Village
Global Marketing
Strategy
The Global
Economy
The Global
Corporation
Global Marketing Strategy Drivers
• Common customer needs
• Global customers
• Global Distribution &
Communication channels
Global Marketing Evolution
Develop Core
Business Strategy
Core Concepts & Values
Translate/Execute
strategy in selected
countries..
Integrate &
leverage global
assets
& alliances
Country
A
Country
B
Country
C
Country
D
Requisite Global Marketer Expertise
Country/ Market
Knowledge
Cross-Border
Transactions
Knowledge
Cross-Cultural
Knowledge
COUNTRY / MARKET KNOWLEDGE
Risk
Licensing
Contract
Manufacturing
Joint
Venture
Direct
Investment
Export
Return/Control
Research & Intelligence
• Global Marketing Opportunity &
Target Market Assessment
• Market Entry Planning & Strategy
CROSS-BORDER
TRANSACTIONS NOWLEDGE
• Standards,
Regulations & Product
Liability
• Currency
Risk/ Pricing/ Getting Paid
Risk to Exporter
Least Risk
Cash in
Advance
Highest Risk
Confirmed
Irrevocable
Bank
Irrevocable
Letter of
Collection
Letter of Credit Credit
Sight Draft
Bank
Collection Open
Time Draft Account
Cost to Buyer
Highest Cost
Least Cost
CROSS CULTURAL KNOWLEDGE
Cross-Cultural
Understanding,
Sensitivity
Social
Responsibility
&
Government
Relations
Language
Proficiency
CrossCultural
Negotiation
Skills
Globalization:
+&The
Global
Cultural Impacts
Village
The
Global
Economy
Political * Legal &
Regulatory
Considerations
Regional Economic
Integration
Global Pricing
&
NEXT
WEEK:
Distribution
Globalization:
ConsiderationsAs
Global
Marketing
a Business &
International
Marketing
Marketing
Strategy
Strategy
Communication
The
CultureGlobal
* Customs &
Business Practices
Corporation