The Microenvironment in an Era of Global Competition CHAPTER 4 The Microenvironment in an Era of Global Competition 1

Objectives Understand microenvironmental four C’s Discuss customer economic utility Understanding various competitive strategies Describe the value chain Understand importance of global competition Discuss global impact on the four C’s Identify global cultural differences Discuss structuring management for international marketing

THE FOUR Cs Competitors Collaborators Company Customers 2

The Four Cs: Company Total organization Interactive Flexibility Entrepreneurial approach Intrapreneurial approach 3

The Four Cs: Customers - Economic Utility Form Utility Place Utility Time Utility Possession Utility 4

Form Utility Created by conversion of raw materials into finished goods or services.

Place Utility Created by making goods and services available where consumers want them. Convenience store

Time Utility Created by making goods and services available when consumers want them.

Possession Utility Retailer Created by transfer of physical possession and ownership of a product to a consumer Consumer

The Four Cs: Competitors Levels Product class Product category Brands Type Price Form Time Location 5

Four Types of Competition Price-based Quality-based Location-based Time-based

The Four Cs:Collaborators Alliances Networks Informal partnerships Suppliers Virtual corporations 8

The Value Chain DOWNSTREAM UPSTREAM PRIMARY ACTIVITIES C u s t o m e r Transportation company Wholesaler Retailer Raw Materials Supplier Components Service Company 10

Core Competency “…is a proficiency in a critical functional activity that helps provide a company’s unique competitive advantage.” Resource Concentration Unique Value Executed in-house Competitive superiority 12

Global Economy Imports Exports 15

The Four Cs in a Global Economy: Company Go/No Go Competition is global Price of beans in Columbia ? Wine production in France? Oil supply from Middle East & The Russian Federation? 23

Four Cs in a Global Economy: Customers Cultural values Religious beliefs Trends Government “policy” 16

Four Cs in a Global Economy: Competitors Intensified “Home field” advantages Japanese keiretsu Tariffs and import quotas 21

Four Cs in a Global Economy: Collaborators Direct Investment Exporting Joint Venturing Capital Outlay/Risks High Low 21

The Four Cs in a Global Economy: Collaborators Central role of technology 25

Review Understand microenvironmental four C’s Discuss customer economic utility Understanding various competitive strategies Describe the value chain Understand importance of global competition Discuss global impact on the four C’s Identify global cultural differences Discuss structuring management for international marketing