Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. Global Strategic Planning Chapter 12

Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2004 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 PresentationsCopyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. Global Marketing Evolution Core Business Strategy Country A Country B Country C Country D Develop Core Business Strategy Internationalize the Strategy Globalize the Strategy 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 PresentationsCopyright © 2004 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 PresentationsCopyright © 2004 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 PresentationsCopyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. The Strategic Planning Process Assessment and Adjustment of Core Strategy Market/Competitive Analysis - Internal Analysis Assessment and Adjustment of Core Strategy Market/Competitive Analysis - Internal Analysis Formulation of Global Strategy Choice of Target Countries, Segments, and Competitive Strategy Formulation of Global Strategy Choice of Target Countries, Segments, and Competitive Strategy Development of Global Marketing Program Implementation Organizational Structure - Control Implementation Organizational Structure - Control Global Strategy Formulation

Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2004 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 PresentationsCopyright © 2004 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 PresentationsCopyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. Competitive Strategies Cost Leadership Broad Differentiation Source of Competitive Advantage Low CostDifferentiation Industry-wide Single Segment Competitive Scope Focus SOURCE: Michael Porter, Competitive Advantage: Creating and Sustaining Superior Performance (New York: Free Press, 1998), chapter 1.

Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. Bases for Global Market Segmentation Environmental Variables Environmental Variables Marketing Management Variables Marketing Management Variables Geographic Variables Geographic Variables Political Variables Political Variables Economic Variables Economic Variables Cultural Variables Cultural Variables Promotion Variables Promotion Variables Product Variables Product Variables Price Variables Price Variables Distribution Variables Distribution Variables Bases for International Market Segmentation

Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2004 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 PresentationsCopyright © 2004 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 PresentationsCopyright © 2004 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 PresentationsCopyright © 2004 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 PresentationsCopyright © 2004 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 PresentationsCopyright © 2004 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.