Transcript Five Major Factors Involved in the Decision to “go international”

Global Market Entry Strategies
Differences in the International Market Environment
• Culture
• Political Stability
• Trade Regulations
• Economic Development/Conditions
• Marketing/Business Infrastructure
• Product/service fit
• Market – size, potential
• Competition.
The Global Market Opportunity Analysis
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Consumer Analysis
Product/Service/Brand (offering) Analysis
Price Analysis
Distribution/Supply Chain Analysis
Promotion/Marketing Communications Analysis
Employees/Staff Analysis
Infrastructure/Building/Vicinity Analysis
Work ethic/Workforce attitude to work Analysis
Environmental Analysis - - PESTLE
Global Market Opportunity Analysis contd.
The Preceding analyses lead to Firm’s:
• Marketing Planning Analysis
• SWOT Analysis
• Gap – Niche Analysis
• Financial Analysis
• Competition Analysis
• Operational Analysis
• Human Resources/Manpower Analysis
What is Marketing Planning?
• Defined as the planned application
of marketing resources to achieve
marketing objectives.
• In other words, it is the logical and systematic
sequence of the various activities effected in the
setting up of corporate objectives and the
formulation of plans for achieving them
(McDonald, 1992, pp.13).
Marketing Planning contd.
Where are
we now?
How are
we doing?
Where do
We want to
be?
How shall we
get there?
Key issues about Marketing Planning
Analysis
• 1. Analysis of the market (i.e., where are we now?)
• 2. Setting of objectives and Aims (i.e., where do we want to be?)
• 3. Methods and Determination of strategy(ies) and tactics (i.e.,
How will we get there?)
• 4. Formulation of evaluation procedures (i.e., Are we getting
there?). Evaluation may be geared toward products, markets,
profits/results.
• Procedures may include (a) assessment of sales reports, (b) profit
analysis, (c) manpower productivity, (d) consumer satisfaction or
complaints assessments, (e) consumer perceptions about
offering/firm, (f) financial, working capital, liquidity assessment,
(g) capital/equipment assessment.
Five Major Factors Involved in the
Decision to “go international”
• Proactive Factors: (1) Niche products, (2)
Economies of scale/scope.
• Reactive Factors: (3) Threats in the external
environment (competitive, regulatory), (4)
Insufficient domestic market growth (static, not
enough to meet firm’s growth targets), (5)
Adjustment to changing customer needs
(automobile components, manufacturers).
Factors Influencing Marketing in the
Global Market
1.
Industry Globalization Drivers:
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Globally standardized customer needs (Levitt, 1983).
Global or regional customer/channels.
Customer reaction to foreign marketing.
Effect of exposure outside home country.
Overall market globalization drivers.
Firm position and strategy:
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Global coverage.
Global market share.
3.Organizational factors:
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Global marketing workforce/CEO/VP
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Globally concentrated value chain.
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Parent firm characteristics:
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Parent firm size
Nationality of parent firm
The Categorization of
Countries (
a selection)
Characteristic
Hot Country
Moderate
Country
Cold Country
Political stability
High
Medium
Low
Market opportunity
Economic development
Cultural unity
Legal, business culture
Ties with home
country
The Methods of Entry to the
Targeted Market (Country)
• Exporting (e.g. through local agents or
subsidiaries).
• Licensing (e.g. through local agents).
• Franchising (e.g. through local companies etc.).
• Joint Ventures (with local
entrepreneurs/affiliates/governments).
• Full Ownership (largely total ownership; 90 100%).
Methods of entry contd.
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Standardization.
Adaptation.
Pluralistic.
Concentration.
Diversification.
Decisions on International Offerings
• “…There is only one significant respect in
which a company’s activities around the
world is important, and that is in what it
produces and how it sells. Everything else
derives from and is subsidiary to, these
activities…” Levitt (1983).
Further discussion
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Japanese management vs. American management
“world class manufacturing”?
Country of origin effects?
Awareness of different cultural preferences?
Is there global consumer culture? – from Timbuktu to
Sydney through New York, Paris and Shanghai.
• Is there a powerful force driving the world toward a
commonality, i.e., technology – ICT?
• Protectionism?
• “No nation is an Island”?
Final questions
• What is global brand/product/service?
• What does the following acronyms stand for?
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EU
EFTA
ECSC
NAFTA
TRIAD
ECOWAS
EEC.
Capital towns of the following countries:……………