1. 8. Global Marketing Strategies

2. Chapter Overview
1. Information Technology and Global Competition 2. Global Strategy 3. Global Marketing Strategy 4. R&D, Operations, Marketing Interfaces 5. Regionalization of Global Marketing Strategy 6. Competitive Analysis

3. 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.
Not only firms that compete internationally but also those whose primary market is considered domestic will be affected by competition from around the world.

4. 1. Information Technology and Global Competition
Today, we are observing the emergence of a gross information product, and it dwarfs the gross domestic product.
Electronic Commerce (e-Commerce)
e-Company
Faster Product Diffusion
Global Citizenship

5. 2. Global Strategy
Global strategy consists of five conceptualizations:
1. Global industry
2. Competitive industry
3. Competitive advantage
4. Hypercompetition
5. Interdependency

6. 2. Global Strategy 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.

7. 2. Global Strategy Industry Globalization Forces (Exhibit 8-1):
Four forces interact to determine the potential of industry globalization.
1. Market forces
2. Cost forces
3. Government forces
4. Competition forces

8. Exhibit 8-1: Industry Globalization Drivers

9. 2. Global Strategy
Market Forces 1. Per capita income convergence 2. Rich consumers in emerging markets 3. Revolution in communication technology 4. Organizations behaving as global customers 5. Growth of global and regional channels 6. Establishment of world brands 7. Spread of global and regional media

10. 2. Global Strategy Cost Forces 1. Global economies of scale and scope
2. Steep experience curve
3. Global sourcing efficiencies
4. Favorable logistics
5. Difference in country costs
6. High product development costs
7. Fast-changing technology
8. Shorter product life cycles

11. 2. Global Strategy Government Forces Competitive Forces
1. Favorable trade policies
2. Compatible technical standards
3. World Trading Regulations
4. High growth/low labor cost developing countries
5. Deregulation/privatization of industries
Competitive Forces
1. High exports and imports
2. Competitors from different continents and
countries
3. Interdependent countries
4. Globalized competitors

12. 2. Global Strategy Competitive Structure Cost leadership
Product differentiation
Niche strategy
Nature of Competitive Industry Structure (Exhibit 8-2):
»Industry competitors
»Potential entrants
»Bargaining power of suppliers
»Bargaining power of buyers
»Threats of substitute products or services

13. Exhibit 8-2: Nature of Competitive Industry Structure

14. 2. Global Strategy Gaining Competitive Advantage
Cost Leadership vs Product Differentiation/ Niche
First-mover advantage versus first-mover disadvantage
Competitor-focused approach
Customer-focused approach

15. 2. Global Strategy Hypercompetition: Interdependency:
Interdependency of modern companies
Example: Global computer industry
Governments also play a larger role, affecting parts of the firm’s strategy.

16. 3. Global Marketing Strategy
Benefits of Global Marketing:
Cost Reduction
Improved Products and Program Effectiveness
Enhanced Customer Preference
Increased Competitive Advantage
Limits to Global Marketing:
Standardization vs. adaptation issues
Globalization vs. localization
Global integration vs. local responsiveness
Scale vs. sensitivity

17. 3. Global Marketing Strategy
Not every element need be standardized to the same degree (Exhibit 8-3)
Degree of product standardization varies widely based on many factors (Exhibit 8-4)

18. Exhibit 8-3: Variation in Content and Coverage of Global Marketing

19. Exhibit 8-4: Degree of Standardizability of Products in World Markets

20. 4. R&D, Operations and Marketing Interfaces
R&D/Operations Interface
Operations/Marketing Interface
Core Components Standardization
Product Design Families
Universal Products with all Features
Universal Product with Different Positioning
Marketing/R&D Interface

21. Exhibit 8-5: Interfaces among R&D, Manufacturing, and Marketing

22. 5. Regionalization of Global Marketing Strategy
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 Market Segments
Use of “Lead Market” Concept
Marketing Strategies for Emerging Markets

23. 6. Competitive Analysis
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.

24. Exhibit 8-6: SWOT Analysis