Chapter 8Kotabe & Helsen's Global Marketing Management, Third Edition, Global Marketing Management Masaaki Kotabe & Kristiaan Helsen Third Edition John Wiley & Sons, Inc., 2004

Chapter 8Kotabe & Helsen's Global Marketing Management, Third Edition, Chapter 8 Global Marketing Strategies

Chapter 8Kotabe & Helsen's Global Marketing Management, Third Edition, Chapter Overview 1.Information Technology and Global Competition 2. Global Strategy 3. Global Marketing Strategy 4. Regionalization of Global Marketing Strategy 5. Competitive Analysis

Chapter 8Kotabe & Helsen's Global Marketing Management, Third Edition, 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. 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. Not only firms that compete internationally but also those whose primary market is considered domestic will be affected by competition from around the world.

Chapter 8Kotabe & Helsen's Global Marketing Management, Third Edition, Information Technology and Global Competition Today, we are observing the emergence of a gross information product, and it dwarfs the gross domestic product. Today, we are observing the emergence of a gross information product, and it dwarfs the gross domestic product. Electronic Commerce (E-Commerce) Electronic Commerce (E-Commerce) Real-Time Management Real-Time Management Online Communications Online Communications “Internet” Organization “Internet” Organization Faster Product Diffusion Faster Product Diffusion

Chapter 8Kotabe & Helsen's Global Marketing Management, Third Edition, Information Technology and Global Competition (contd.) Global Citizenship Global Citizenship

Chapter 8Kotabe & Helsen's Global Marketing Management, Third Edition, Global Strategy Global Industry: 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.

Chapter 8Kotabe & Helsen's Global Marketing Management, Third Edition, Global Strategy (contd.) Industry Globalization Drivers (Yip, G. S., Total Global Strategy, Prentice Hall, 1992). Market Drivers Market Drivers Cost IndustryGovernment Cost IndustryGovernment DriversGlobalization Drivers DriversGlobalization Drivers Potential Potential Competitive Drivers Competitive Drivers

Chapter 8Kotabe & Helsen's Global Marketing Management, Third Edition, Global Strategy (contd.) Industry Globalization Drivers (see Exhibit 8-1): Industry Globalization Drivers (see Exhibit 8-1): –Market Globalization Drivers 1. Common customer needs 2. Global customer and channels 3. Transferable marketing 4. Lead countries –Cost Globalization Drivers 1. Global economies of scale and scope 2. Steep experience curve

Chapter 8Kotabe & Helsen's Global Marketing Management, Third Edition, Global Strategy (contd.) 3. Global sourcing efficiencies 4. Favorable logistics 5. Difference in country costs 6. High product development costs 7. Fast-changing technology –Government Globalization Drivers 1. Favorable trade policies

Chapter 8Kotabe & Helsen's Global Marketing Management, Third Edition, Global Strategy (contd.) 2. Compatible technical standards 3. Common Market Regulations 4. Government-owned Competitors 4. Government-owned Competitors 5. Government-owned Customers 5. Government-owned Customers –Competitive Globalization Drivers 1.High exports and imports 2.Competitors from different continents and countries 3.Interdependent countries 4.Globalized competitors

Chapter 8Kotabe & Helsen's Global Marketing Management, Third Edition, Global Strategy (contd.) Competitive Structure Competitive Structure –Cost leadership –Product differentiation –Niche strategy –Nature of Competitive Industry Structure (see Exhibit 8-2): »Industry competitors »Potential entrants

Chapter 8Kotabe & Helsen's Global Marketing Management, Third Edition, Global Strategy (contd.) »Bargaining power of suppliers »Bargaining power of buyers »Threats of substitute products or services Hypercompetition Hypercompetition –Creative destruction –Cost and quality –Timing and know-how –Strongholds

Chapter 8Kotabe & Helsen's Global Marketing Management, Third Edition, Global Strategy (contd.) –Financial resources Interdependency: Interdependency: –Interdependency of modern companies –Example: Global computer industry –Governments also play a larger role, affecting parts of the firm’s strategy.

Chapter 8Kotabe & Helsen's Global Marketing Management, Third Edition, Global Marketing Strategy Benefits of Global Marketing: Benefits of Global Marketing: –Cost Reduction –Improved Products and Program Effectiveness –Enhanced Customer Preference –Increased Competitive Advantage Limits to Global Marketing: Limits to Global Marketing: –Standardization vs. adaptation issues –Globalization vs. localization –Global integration vs. local responsiveness –Scale vs. sensitivity

Chapter 8Kotabe & Helsen's Global Marketing Management, Third Edition, Regionalization of Global Marketing Strategy Regional strategies are the cross-subsidization of market share battles in pursuit of regional production, branding, and distribution advantages. 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 Markets »Use of Lead Market Concept »Marketing Strategies for Emerging Markets

Chapter 8Kotabe & Helsen's Global Marketing Management, Third Edition, Competitive Analysis SWOT (Strengths, Weaknesses, Opportunities, and Threats) Analysis (see Exhibit 8-6) 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.

Chapter 8Kotabe & Helsen's Global Marketing Management, Third Edition, Copyright © John Wiley & Sons, Inc. 2004