Transcript ORGANIZING GLOBAL MARKETING EFFORTS Chapter

Planning, Organization, and
Control of Global Marketing
Operations
CHAPTER OVERVIEW
 Global Strategic Marketing Planning
 Key Criteria in Global Organizational Design
 Organizational Design Options
 Organizing for Global Brand Management
 Life Cycle of Organizational Structures
 To Centralize or Decentralize?
 Controlling Global Marketing Efforts
1
Introduction


The capstone of a company’s global
marketing activities will be its marketing
plan.
To implement its global plans effectively, a
company needs to reflect on the best
organizational setup that enables it to
successfully meet the threats and
opportunities posed by the global
marketing arena.
2
Introduction

Global marketers must confront organizational
issues such as:
(a). What is the proper communication and
reporting structure?
(b). Who within the organization should bear
responsibility for each of the functions that need
to be carried out?
(c). How can an organization leverage the
competencies and skills of its individual
subsidiaries?
(d). Where should the decision-making authority
belong for the various areas?
3
1. Global Strategic Marketing Planning
 The content of a global strategic marketing plan
usually covers four areas:
1. Market situation analysis
2. Objectives
3. Strategies
4. Action plans
 Bottom-Up versus Top-Down Strategic Planning
4
1. Global Strategic Marketing Planning
 Pitfalls: Marketing plans can go wrong. The top
three stumbling blocks are:
1. Lack of proper information
2. Too little emphasis on the development of
alternative strategic options
3. Unrealistic strategic objectives
….. external factors can also interfere.
5
2. Key Criteria in Global Organizational
Design
 Environmental Factors:
– Competitive Environment
– Rate of Environmental Change
– Regional Trading Blocs
– Nature of Customers
6
2. Key Criteria in Global Organization
Design
 Firm-Specific Factors:
– Strategic Importance of International Business
– Product Diversity
– Company Heritage
– Quality of Local Managerial Skills
7
3. Organizational Design Options
 International Division Structure
 Global Product Division Structure (see Exhibit
18-2)
8
3. Organizational Design Options
 Geographic Structure (see Exhibit 18-3)
– Country-Based Subsidiaries
– New Role of Country Managers: Country managers of
the twenty-first century should have the following five
profiles:
 The trader
 The builder
 The cabinet member
 The ambassador
 The representative
 The country prince (country manager and product
champion)
9
3. Organizational Design Options
10
3. Organizational Design Options
– Regional Structures: A recent survey done in the Pacific
region singles out five distinct roles for regional
headquarters (RHQs):
 Scouting
 Strategic simulation
 Signaling commitment
 Coordination
 Pooling resources
 Matrix Structure (see Exhibit 18-4)
– The matrix structure explicitly recognizes the
multidimensional nature of global strategic decision
making.
– With a matrix organization, two dimensions are
integrated into the organization.
11
3. Organizational Design Options
12
3. Organizational Design Options
 The Global Network Solution (see Exhibit 18-5)
– The networked global organization is
sometimes also referred to as a transnational.
Examples: Asea-Brown Boveri (ABB), Toyota
– In the network model, each national unit can be
viewed as a source of ideas, skills, capabilities,
and knowledge that can be harnessed for the
benefit of the total organization.
13
3. Organizational Design Options
14
3. Organizational Design Options
15
4. Organizing for Global Brand
Management
 Global Branding Committee
– Usually made up of top-line executives from
headquarters, regional, or local offices.
 Brand Champion
– A brand champion is a top-line executive
(sometimes a CEO).
16
4. Organizing for Global Brand
Management
 Global Brand Manager: For the global brand manager to
be effective, the following conditions should hold:
– The top of the organization is committed to branding.
– There is a solid strategic planning process in place.
– Managers see the need to travel to learn about local
management and best practices.
– There is a system to identify, mentor, and train
prospects who can fill the role.
 Informal, Ad-hoc Branding Meetings
17
5. Life Cycle of Organization Structures
 Companies need to adapt their organization
for a variety of possible reasons- existing
structures may have become too rigid or
complex, environmental changes, managers
learn new skills or new senior management
is brought in.
 Successful restructuring take time, planning
and resources. Often requires a
fundamental cultural change.
18
5. Life Cycle of Organization Structures
 Several management theorists have made an
attempt to come up with the “right” fit between the
MNC’s environment (internal and external) and the
organization.
 One of the major popular schemas is the stages
model developed by Stopford & Wells (see Exhibit
18-7). The schema shows the relationship
between the organizational structure, foreign
product diversity, and the importance of foreign
sales to the company (as a share of total sales).
19
5. Life Cycle of Organization Structures
 Glocal Mind-Set: Country and regional managers
must look at strategic issues from multiple
perspectives.
20
6. Centralization or Decentralization?
 Centralization and Consolidations: In practice,
MNCs are somewhere between these two
extremes.
 Transnational Solution: Companies strike a
balance between centralization and
decentralization.
21
6. Centralization or Decentralization?
 Federalism: Federalism is a way to combine the
autonomy of the local units with the benefits of
coordination. The model has the following
characteristics:
– Non-centralization
–
–
–
–
–
Negotianalism
Constitutionalism
Territoriality
Balance of Power
Autonomy
22
6. Centralization or Decentralization?
23
6. Centralization or Decentralization?
24
7. Control of Global Marketing Efforts
 Formal (“Bureaucratic”) Control Systems
– Establishing Standards (Metrics)
 Behavior and outcome-based
– Evaluating Performance
– Analyzing and Correcting Deviations
25
7. Control of Global Marketing Efforts
 Informal Control Methods
– Corporate Culture:
 Clan cultures & market cultures
– To shape a shared vision, cultural values should
have three properties:
 Clarity
 Continuity
 Consistency
– Human Resource Development
26
7. Controlling Global Marketing Efforts
 “Soft” versus “Hard” Levers: There are seven
management tools or levers that companies can
use to resolve the global/local tradeoffs:
–
–
–
–
–
–
–
1.
2.
3.
4.
5.
6.
7.
Organizational structure
Process
Incentives
Metrics
Strategy
Networks
Culture
27
7. Controlling Global Marketing Efforts
 For a proper structure and strategic coherence,
the following pieces of advice are offered (see
Summary and Exhibit 18-10):
– Recognize the need for business asymmetry
– Democracy is a must.
– A shared vision is important.
– There is a need for a good mix of specialists of
three types – country; functional; and business.
– Moving unit headquarters abroad seldom solves
the organization’s problems.
28
7. Controlling Global Marketing Efforts
29