1. Unit: V MKT-305-51

2. International Strategy International Strategy is needed to make decisions regarding what products to produce, where to produce them and how to market them. MKT-305-52

3. Strategy Formulation Strategy-formulation permits to step back from day to day activities and get a fresh perspective on the current and future direction of the company. MKT-305-53

4. Strategy-Formulation Process MKT-305-54

5. International Organizational Structure Organizational Structure is the way in which a company divides its objectives among separate units and coordinates activities among those units. MKT-305-55

6. Alternative forms of Organization 1.Centralization 2.Decentralization MKT-305-56

7. Types of Organizational Structural 1.International Division Structural 2.International Area Structural 3.Global Product Structural 4.Global Matrix Structural MKT-305-57

8. International Division Structure MKT-305-58

9. International Area Structure MKT-305-59

10. Global Product Structure MKT-305-510

11. Global Matrix Structure MKT-305-511

12. Analyzing International Opportunities Screening Potential Markets and Sites 1. Identify basic appeal 2.Assess the national business environment 3.Measure the market or site potential 4.Select the market or site MKT-305-512

13. Conducting International Research Difficulties of Conducting International Research 1.Availability of Data 2.Comparability of data 3.Cultural differences MKT-305-513

14. Sources of Secondary International Data International Organizations Government Agencies Industry and Trade Associations Internet MKT-305-514

15. Methods of Conducting Primary International Research  Trade shows and Trade Missions  Interviews and Focus Groups  Surveys MKT-305-515

16. Selecting and Managing Entry Modes  Exporting  Importing  Countertrade MKT-305-516

17. Exporting Sending goods or services to another country for sale Why companies Export? 1. Expand Sales 2.Diversify Sales 3.Gain Experience MKT-305-517

18. Exports to the United States MKT-305-518

19. Developing an Export Strategy Step 1 Identify a potential market Step 2 Match needs to abilities Step 3 Initiate meetings Step 4 Commit resources MKT-305-519

20. Degree of Export Involvement Direct exporting (sell to buyers) Sales representative Distributor Indirect exporting (sell to intermediary) Agent Export management company (EMC) Export trading company (ETC) MKT-305-520

21. Avoiding Export Blunders Conduct market research Obtain export advice Hire a freight forwarder MKT-305-521

22. Import An import is a good brought into a jurisdiction, especially across a national border, from an external source. An import in the receiving country is an export from the sending country. MKT-305-522

23. Counter-trade Practice of selling goods or services that are paid for, in whole or in part, with other goods or services. Types: 1. Barter 2.Counter-purchase 3.Offset 4.Switch Trading 5.Buyback MKT-305-523

24. Forms of Countertrade Barter Direct exchange without money Counterpurchase Sale to a nation in return for promise of future purchase from that nation Offset agreement Offset a hard-currency sale to a nation with future hard-currency purchase Switch trading Sale by a company of obligation to purchase from a country Buyback Export of industrial equipment in return for products that the equipment produces MKT-305-524

25. Contractual Entry Modes  Licensing  Franchising  Management Contracts  Turnkey Projects MKT-305-525

26. Licensing Company owning intangible property (licensor) grants another firm (licensee) the right to use it for a specific time Advantages Finance expansion Reduce risks Reduce counterfeits Upgrade technologies Disadvantages Restrict licensor’s activities Reduce global consistency Lend strategic property MKT-305-526

27. Franchising Company (franchiser) supplies another (franchisee) with intangible property over an extended period Advantages Low cost and low risk Rapid expansion Local knowledge Disadvantages Cumbersome Lost flexibility MKT-305-527

28. Management Contract Company supplies another with managerial expertise for a specific period of time Advantages Few assets risked Nations finance projects Develops local workforce Disadvantages Personnel at risk Create competitor MKT-305-528

29. Turnkey Project Company designs, constructs and tests a production facility for a client Advantages Firms specialize in competency Nations obtain infrastructure Disadvantages Politicized process Create competitor MKT-305-529

30. Investment Entry Modes Wholly Owned subsidiaries Joint Ventures Strategic Alliances Selecting partners for cooperation MKT-305-530

31. Wholly Owned Subsidiary Facility entirely owned and controlled by a single parent company Advantages Day-to-day control Coordinate subsidiaries Disadvantages Expensive High risk MKT-305-531

32. Joint Venture Company created and jointly owned by two or more entities to achieve a common objective Advantages Reduce risk level Penetrate markets Access channels Disadvantages Partner conflict Lose control MKT-305-532

33. Joint Venture Configurations MKT-305-533

34. Strategic Alliance Entities cooperate (but do not form a separate company) to achieve strategic goals of each Advantages Share project cost Tap competitors’ strengths Gain channel access Disadvantages Partner conflict Create competitor MKT-305-534

35. Selecting Partners Commitment Trustworthiness Cultural knowledge Valuable contribution MKT-305-535

36. Strategic Factors Cultural environment Political/Legal environments Market size Production and shipping costs International experience MKT-305-536

37. Strategic Factors in Selecting an Entry Mode o Cultural Environment o Political and Legal Environment o Market Size o Production and Shipping costs o International Experience MKT-305-537

38. Developing and Marketing Products Learning objectives:  Globalization and Marketing  Developing Product Strategies  Creating Promotional Strategies  Designing Distribution Strategies  Developing Pricing Strategies MKT-305-538

39. Globalization and Marketing Standardized product and promotion Consistent image / message Contain costs Adapted product and / or marketing Respond to local needs Exploit unique image MKT-305-539

40. Developing Product Strategies Cultural differences Laws and regulations National image Counterfeit goods MKT-305-540

41. Creating Promotional Strategies  Push and Pull Strategies  International Advertising  Blending Product and Promotional Strategies MKT-305-541

42. Designing Distribution Strategies  Designing Distribution Channels  Influence of Product Characteristics  Special Distribution Problems MKT-305-542

43. Developing Pricing Strategies  Worldwide Pricing  Dual Pricing  Factors that Affect Pricing Decisions MKT-305-543

44. Managing International Operations Learning Objectives: Product Strategy Acquiring Physical Resources Key Production Concerns Financing Business Operations MKT-305-544

45. Production Strategy  Capacity Planning  Facilities Location Planning  Process Planning  Facilities Layout Planning MKT-305-545

46. Acquiring Physical Resources o Make or Buy Decision o Raw Material o Fixed Assets MKT-305-546

47. Key Production Concerns  Quality-improvement Efforts  Shipping and Inventory Costs  Reinvestment versus Divestment MKT-305-547

48. Financing Business Operations Borrowing Issuing Equity Internal Funding Capital Structure MKT-305-548

49. Hiring and Managing Employees Learning Objectives:  International Staffing Policy  Recruiting and Selecting Human Resources  Training and Development  Employee Compensation  Labour Management Relations MKT-305-549

50. International Staffing Policy Ethnocentric Staffing Polycentric Staffing Geocentric Staffing MKT-305-550

51. Ethnocentric Staffing Individuals from home country manage operations abroad Advantages Locally qualified people not always available Tight control over subsidiaries Re-create local operations in home-office image Interests of home office may be better protected Disadvantages Relocations are expensive Give the business a “foreign” image MKT-305-551

52. Polycentric Staffing Individuals from host country manage operations abroad Advantages Responsibility on those knowing local business Avoid expensive relocations from home nation Disadvantages Resemble a collection of national entities Potentially harm performance MKT-305-552

53. Geocentric Staffing Best-qualified individuals, regardless of nationality, manage operations abroad Advantages Managers who can adjust anywhere Break down nationalistic barriers Disadvantage These individuals command high salaries MKT-305-553

54. Recruiting and Selecting Human Resources Human Resource Planning Recruiting Human Resources Selecting Human Resources Culture Shock Reverse Culture Shock MKT-305-554

55. Human Resource Planning Forecasting human resource needs and supply Phase 1 Take inventory of current human resources Phase 2 Estimate firm’s future human resource needs Phase 3 Develop plan to recruit and select people for vacant and anticipated new positions MKT-305-555

56. Recruiting Human Resources Process of identifying and attracting a qualified pool of applicants for vacant positions Current employees Recent college graduates Local managerial talent Nonmanagerial workers MKT-305-556

57. Selecting Human Resources Process of screening and hiring the best-qualified applicants with the greatest performance potential Ability to bridge cultural differences is key Expatriates must adapt to new ways of life Cultural sensitivity raises odds for success MKT-305-557

58. Culture Shock Psychological process affecting people living abroad that is characterized by homesickness, irritability, confusion, aggravation, and depression - Stage I: Thrilling experience - Stage II: Downward slide - Stage III: Recovery begins - Stage IV: Embrace local culture MKT-305-558

59. Reverse Culture Shock Readapting to home culture Once-natural thoughts and feelings now strange Can be more unsettling than culture shock Some companies reabsorb expatriates poorly Reducing its effects Home-culture reorientation programs Career-counseling sessions Career-development program before posting abroad MKT-305-559

60. MKT-305-5 Training and Development  Methods of Cultural Training  Compiling a cultural profile  Non-managerial Worker Training 60

61. MKT-305-5 Methods of Cultural Training 61

62. MKT-305-5 Compiling a Cultural Profile CultureGrams Country Studies Area Handbooks Background Notes 62

63. MKT-305-5 Non-Managerial Worker Training Emerging markets Basic skills training Apprenticeship training 63

64. MKT-305-5 Compensation of Managers Cost-of-living effects Bonus and tax incentives Cultural and social factors 64

65. MKT-305-5 Compensation of Workers Greater cross-border investment Labor mobility in some markets 65

66. MKT-305-5 Labor-Management Relations Positive or negative relations between a company’s management and its workers Rooted in local culture Directly influences workers’ lives Often affected by political movements 66

67. MKT-305-5 Labor Unions Selection of a location Performance in a market Emerging markets Codetermination in Germany 67

68. MKT-305-5 International Labor Movements International activities of unions are making progress in improving treatment of workers and reducing child labor But can be difficult: Events in distant lands difficult to comprehend - Workers in different nations often compete 68

69. Home assignment MKT-305-5 What are the different sources of Financing Business Operations. Select any Multi- national company of your choice working in Saudi Arabia. 69