Lecture Global marketing management (7th edition): Chapter 8 - Masaaki Kotabe, Kristiaan Helsen

Chapter global marketing strategies. What you should learn from chapter 8: The four heritages of today’s legal systems, the important factors in the jurisdiction of legal disputes, the various methods of dispute resolution, the unique problems of protecting intellectual property rights internationally, how to protect against piracy and counterfeiting,...

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

Chapter 8 Copyright © 2017 John Wiley & Sons,

• 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.

1 Information Technology and

2 Global Strategy

Industry Globalization Forces (Exhibit 8-1):

Four forces interact to determine the potential of

Exhibit 8-1: Industry Globalization Drivers

Chapter 8 Copyright © 2017 John Wiley & Sons,

2 Global Strategy

Market Forces

1 Per capita income convergence

2 Rich consumers in emerging markets

3 Convergence of lifestyles and tastes

4 Revolution in communication technology

5 Knowledgeable global consumers

6 Organizations behaving as global customers

7 Growth of global and regional channels

8 Establishment of world brands

9 Spread of global and regional media

2 Global Strategy

Cost Forces

1 Global economies of scale and scope

2 Accelerating technological innovations

3 Advances in transportation

4 Newly industrializing countries with low-cost labor

5 High product development costs

Chapter 8 Copyright © 2017 John Wiley & Sons,

2 Global StrategyGovernment Forces

1 Reduction of tariff and nontariff barriers

2 Trade blocs

3 Deregulation of industries

4 Privatization of economies

5 Open-market economies

2 Global Strategy

Competitive Forces

1 Increase of world trade

2 More key competitive battlegrounds 3.Foreign ownership of corporations 4.Globalization of financial markets 5.New global competitors

6.Global internet and other companies 7.Geocentric, not ethnocentric, companies 8.Global alliances

Chapter 8 Copyright © 2017 John Wiley & Sons,

»Bargaining power of suppliers

»Bargaining power of buyers

»Threats of substitute products or services

Exhibit 8-2: Nature of Competitive Industry Structure

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2 Global Strategy

• Gaining Competitive Advantage

– First-mover advantage versus first-mover

disadvantage

– Technology-driven approach

– Competitor-focused approach

– Customer-focused approach

2 Global Strategy

• Hypercompetition

• Interdependency:

– Interdependency of modern companies

– Example: Smartphone industry

– Governments also play a larger role, affecting parts of the firm’s strategy

Chapter 8 Copyright © 2017 John Wiley & Sons,

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

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)

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

Exhibit 8-4: Degree of Standardizability of

Products in World Markets

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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

Exhibit 8-5: Interfaces among R&D, Operations, and Marketing

Chapter 8 Copyright © 2017 John Wiley & Sons,

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

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

Chapter 8 Copyright © 2017 John Wiley & Sons,

Exhibit 8-6: SWOT Analysis