Global Market Strategies

The Internationalization of U.S. Business ä Many U.S. Companies are now foreign owned. ä Companies with only domestic markets have found it difficult to sustain customary rates of growth. ä Many companies are increasingly seeking foreign markets.

Foreign Acquisitions of U.S. Companies U.S. CompaniesForeign Owner Bestfoods (foods)U.K. Ben & Jerry’s (ice cream)U.K. Alpo (pet food)Swiss Pillsbury (food)U.K. Burger King (fast food)U.K. Random House (publishing)Germany Chrysler (autos)Germany TV Guide (magazine)Australia New York Post (newspaper)Australia LA Dodgers (sports)Australia Arco (gasoline) U.K. CompUSA (retailing) Mexico Seagram (alcoholic beverages)France SOURCE: Adapted from Kuri Badenhausen. “Name Game”, Forbes. Jul 24, 2000 Irwin/McGraw-Hill 1-2

Top 10 U.S. Players in the Global Game Company Foreign Revenues ($ Mil) Foreign Revenues (% of Total) Foreign Profits (% of Total) SOURCE: Adapted from Brian Zajac, “Global Giants”. Forbes, July 24, 2000 Irwin/McGraw-Hill 1-4 Foreign Assets (% of Total) ExxonMobil IBM Ford Motor General Motors General Electric Texaco Citigroup Hewlett-Packard Wal-Mart Stores Compaq Computer 115,464 50,377 50,138 46,485 35,350 32,700 28,749 23,398 22,728 21, N/A N/A

International Marketing Defined ä International Marketing is the performance of business activities that direct the flow of a company’s goods and services to consumers or users in more than one nation for a profit. ä Marketing concepts and principles stay the same, but the environment changes.

7 The International Marketing Task Political/legal forces Economic forces 1 2 Environmental uncontrollables country market A Environmental uncontrollables country market B Environmental uncontrollables country market C Competitive structure Competitive Forces Level of Technology PriceProduct Promotion Channels of distribution Geography and Infrastructure Foreign environment (uncontrollable) Structure of distribution Economic climate Cultural forces Political/ legal forces Domestic environment (uncontrollable) (controllable)

Environmental Adaptation ä Adjusting to a country’s culture (uncontrollable environment) is critical. ä Consider and adjust your frame of reference. ä Avoid cultural errors by being aware of cultural relativism--marketing strategies and judgments are based on experience, and experience is interpreted by each marketer in terms of his/her own culture.

Being Globally Aware  To be Globally Aware is to be: Objective Tolerant of Cultural Differences Knowledgeable of: Cultures History World Market Potentials Global Economic and Social Trends

Entry Strategies ä Exporting ä The Internet ä Contractual Agreements ä Joint Ventures ä Direct Foreign Investment ä Strategic International Alliances

Trends in Global Business Internationalization of U.S. Markets Internationalization of U.S. Business Growth of Regional Trade Areas Move toward free market system by countries in Latin America, Asia, Eastern Europe Large Emerging Markets such as Argentina, China, South Korea, Poland, India Evolving global middle income households GATT and World Trade Organization The TRIAD

Possible Regional Trade Groups in the 21st Century Western Hemisphere Free Trade Areas (WHFTA) Canada to Argentina Asia-Pacific Economic Cooperation (APEC) Pacific Rim Countries including U.S. U.S./Canada/Mexico/Japan South American Free Trade Area (SAFTA) Andean Pact and Mercosur Chinese Economic Area (CEA) Hong Kong, Taiwan, Coastal Provinces of So. China U.S./European Union Many possibilities of Republics of Russia, Baltic States