Transcript Ch06

Chapter 6
Strategic Planning
Developed by Cool Pictures & MultiMedia Presentations
Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved.
Global Marketing
• “…the world is becoming more homogenous…”
• “...distinctions between national markets are fading
and may disappear…”
Developed by Cool Pictures & MultiMedia Presentations
Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved.
Global Marketing Evolution
Develop Core
Business Strategy
Core Business Strategy
Internationalize
the Strategy
Globalize
the Strategy
Country
A
Country
B
Country
C
Country
D
Source: Reprinted from “Global Strategy… In a World of Nations?” by George S. Yip, Sloan
Management Review 31 (Fall 1989): 30, by permission of the publisher. Copyright 1989 by Sloan
Management Review Association. All rights reserved.
Developed by Cool Pictures & MultiMedia Presentations
Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved.
Globalization Drivers
• Market Factors
– new consumer groups, developed infrastructures,
globalization of distribution channels, cross-border retail
alliances
• Cost Factors
– avoiding cost inefficiencies
and duplicated efforts
• Environmental Factors
– reduced governmental barriers,
rapid technological evolution
• Competitive Factors
– rapid product innovation, introduction, distribution
Developed by Cool Pictures & MultiMedia Presentations
Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved.
The Strategic Planning Process
• Understanding and adjusting the core strategy begins
with a clear definition of the business for which the
strategy is to be developed.
• The Strategic Business Unit
– Based on product market similarities
• Similar needs or wants to be met
• Similar end user customers to be targeted
• Similar products or services used to meet
needs of specific customers
Developed by Cool Pictures & MultiMedia Presentations
Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved.
The Strategic Planning Process
Global Strategy Formulation
Assessment and Adjustment of Core Strategy
Market/Competitive Analysis - Internal Analysis
Formulation of Global Strategy
Choice of Target Countries, Segments, and Competitive Strategy
Development of Global Marketing Program
Implementation
Organizational Structure - Control
Developed by Cool Pictures & MultiMedia Presentations
Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved.
Market and Competitive
Analysis
• First, understand the structure of the global market
industry; the common features of customer
requirements and choice factors.
• Internal analysis
– Examine the readiness and capability of the firm to
undertake strategic moves with its current
resources.
Developed by Cool Pictures & MultiMedia Presentations
Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved.
Formulating Global Marketing
Strategy
• Formulation begins with a series of strategic decisions
• Choice of Competitive Strategy
– Cost leadership
– Differentiation
– Focus
• Country-Market Choice
– Concentration or diversification
– Factors in country markets selection
• The stand-alone attractiveness of the market
• Global strategic importance of the market
• Possible synergies offered by the market
Developed by Cool Pictures & MultiMedia Presentations
Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved.
Competitive Strategies
Source of Competitive Advantage
Competitive
Scope
Industry-wide
Single
Segment
Low Cost
Cost
Leadership
Differentiation
Broad
Differentiation
Focus
SOURCE: Michael Porter, Competitive Advantage: Creating and Sustaining Superior Performance (New York: Free Press, 1998), chapter 1.
Developed by Cool Pictures & MultiMedia Presentations
Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved.
Bases for Global Market
Segmentation
Bases for International
Market Segmentation
Marketing
Management
Variables
Environmental
Variables
Geographic
Variables
Product
Variables
Developed by Cool Pictures & MultiMedia Presentations
Political
Variables
Promotion
Variables
Economic
Variables
Price
Variables
Cultural
Variables
Distribution
Variables
Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved.
Global Marketing Program
Development
• Development Decisions
– Product offering
• The degree of standardization and adaptation in the
product offering.
– The marketing approach
• The marketing program beyond the product variable.
– The location and extent of value-adding activities
• Pooling production.
• Exploiting factor costs or capabilities.
• Strategic alliances.
• Concurrent engineering.
– Competitive moves to be made
• Cross-subsidization using resources accumulated in one
market to wage a competitive battle in another.
Developed by Cool Pictures & MultiMedia Presentations
Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved.
Implementing Global Marketing
• Success will come from a balance between local and
regional / global concerns.
• “Think globally, act locally” is the operative phrase for
global marketers competing in country markets.
• Product choices should consider individual markets
as well as transfer products from one region to
another.
Developed by Cool Pictures & MultiMedia Presentations
Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved.
Global Marketing Pitfalls to
Avoid
•
•
•
•
Insufficient local market research.
The tendency to over standardize the product.
Inflexibility in planning and implementation.
The “Not-Invented-Here” syndrome (NIH).
– How to avoid the NIH syndrome
• Ensure that local managers participate in the
development of global brand marketing
strategies.
• Encourage local managers to develop ideas for
regional or global use.
Developed by Cool Pictures & MultiMedia Presentations
Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved.
Localizing Global Marketing
• Achieving a balance between in-country managers
and global product managers at corporate
headquarters will require action to develop and
implement a global strategy.
Developed by Cool Pictures & MultiMedia Presentations
Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved.
Localizing Global Marketing
• Management processes
– Enhance the global transfer of communications.
– Interchange personnel to gain experience abroad.
– Headquarters should coordinate and leverage
resources.
– Permit local managers to develop their own
programs within defined parameters Maintain a
product portfolio that includes local as well as
regional or global brands.
– Allow local managers control over marketing
budgets to respond to local customer needs and
counter global competition.
Developed by Cool Pictures & MultiMedia Presentations
Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved.
Localizing Global Marketing
• Organization structures
– The shift to global account management.
• Corporate culture
– The world is not one single market.
– Plan and execute programs on a worldwide basis.
– A global Identity favors no specific country.
Developed by Cool Pictures & MultiMedia Presentations
Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved.