1. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations

2. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Several forces are driving companies around the world to globalize by expanding their participation in foreign markets. External Drivers of Globalization

3. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations The firm must find, or create, a willingness among customers to pay for environmental quality. The business must establish credible information about the environmental benefits of its products. The innovation must be difficult for competitors to imitate. Three Requirements of Environmental Product Differentiation

4. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations A first step in developing effective international marketing strategy centers on understanding the alternative ways that a firm can participate in international markets. The mode of entry selected should consider the level of a firm’s experience overseas and the stage in the evolution of its international involvement. Spectrum of Involvement in International Marketing

5. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Contractual Entry Modes 1.Licensing. 2.Franchising. 3.Management Contracts.

6. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Strategic Alliances Stumbling Blocks Partners are organized quite differently for making marketing and product design decisions. Partners that combine the best set of skills in one country may be poorly equipped to support each other in other countries. The quick pace of technological change often guarantees that the most attractive partner today may not be the most attractive partner tomorrow.

7. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations The Value Chain: Upstream and Downstream Activities A firm that competes in the international market must decide how to spread the activities among countries. Central to this decision is the need to distinguish upstream from downstream activities. Developed by Cool Pictures and MultiMedia Presentations

8. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations The purest global strategy concentrates as many activities as possible in one country, serves the world market from this home base, and closely coordinates those activities that must be performed near the buyer. Types of International Strategy Developed by Cool Pictures and MultiMedia Presentations

9. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Framework For Global Strategy Build on the Foundation of a Unique Competitive Position. Emphasize a Consistent Positioning Strategy across International Markets. Establish a Clear Home Base for Each Distinct Business. Leverage Product-Line Home Bases at Different Locations. Disperse Activities to Extend Home Base Advantages. Coordinate and Integrate Dispersed Activities. Global Strategy Source: Adapted from Michael E. Porter, “Competing Across Locations: Enhancing Competitive Advantage through a Global Strategy,” in Michael E. Porter (ed.), On Competition (Boston: Harvard Business School Press, 1998), pp. 309-350.

10. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Extending the Firm’s Competitive Position 1.Capturing competitive advantages in purchasing. 2.Securing or improving market access. 3.Selectively tapping competitive advantages at other locations.

11. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Global Competitors Achieve Unified Action By: 1.Establishing a clear global strategy. 2.Developing information and accounting systems that are consistent on a worldwide basis. 3.Encouraging personal relationships and the transfer of learning among subsidiary managers.