international business islamia university of bahawalpur delivered by: tasawar javed
Post on 21-Dec-2015
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International Business
Islamia University of Bahawalpur
Delivered by:
Tasawar Javed
This talk includes: Development of Global program Implementing Global program
International Business
Developing Global Program 4 steps Product offering Marketing Approach Location of Value Added Activities Competitive Moves
Stage 3 Development of Global Program
Product Offering
Product standardization may result in significant cost saving
1. Product offering Standardize manufacturing process to reduce costs
and increases globalization of company Differentiate at end of production to suit different
segment preferences (handsaw) Example: whirlpool use common platforms for US and
European markets to reduce costs by sharing technology and suppliers
At the end stage they will add components which will differentiate between the “top of the line” and the “no Frills” versions
Product Offering
Uniformity is sought especially in elements that are strategic (positioning) in nature, whereas care is taken to localize necessary tactical elements (distribution)
Marketing Approach
Glocalization
2. Marketing Approach Glocalization: is when marketeers balance the
need for production uniformity against the needs of customers in different regions
In the way a globalised manufacturer localises the selling of his product
Example: Unilever use the same marketing theme and symbol (teddy bear) when advertising fabric softener throughout the world. But in different regions the bear is given a different name and there are different bottle sizes
Stage 3: Development of Global Program
Cost Reduction
Location of Value-Added Activities
Pool Production
Concentrate Activities
Exploit Factor Costs
3. Location of Value-Added Activities1. the location R&D is crucial to globalization.Ensure R&D is located close to factory floor.Ensure R&D centres have joint projects and are in real-time contactThis interlinks each R&D centre and prevents doubling up2. have one specialist unit for after sale customer care to cover a whole number of countries rather than one in each country (Sony)
This can be done to improved transportation links
Stage 3: Development of Global Program
Global companies may have to respond to competitive moves in a variety of markets
Cross-subsidization may offer competitive advantage
Competitive Moves
4. Competitive Moves
Competition = war/game of strategy
Be ready to react to attacks in any region and counterattack – may be in different region
Example: Fuji attacked Kodak’s market share in US, Kodak reacted by attacking the Japanese market
Stage 3: Development of Global Program
Cross-Subsidisation = using resources accumulated in one region to fight a competitive battle in another
Mobile Phone industry – the companies that will succeed in the future are those that can provide low cost phones in emerging economies while also offering internet based devices elsewhere eg Vodafone?
Stage 3: Development of Global Program
Successful Companies strive to balance local and global concerns
Too much local production may reduce import positioning
Too little planning involvement by the country organization may lead to NIH (not invested here Syndrome)
Implementing Global Programs
Ensure that local managers participate in the development of strategies and programs
Encourage local managers to generate ideas Maintain local and global product portfolios Allow local managers to control budget
Example: Tesco Ireland
Avoiding the Not-Invested-Here Syndrome
Stage 4: Implementing Global ProgramTrue globalization occurs when the groups within
an MNC co-ordinate their activities directly
Example: Coca-Cola in 1993 re-entered the Indian market advertising Coca-Cola as it does in the US Europe etc
It begun to lose market position to Pepsi, realised its mistake and changed focus to a local brand
Thus refocusing advertising on a brand more relevant to the local Indian consumer
Localizing Global Moves
The role of headquarters staff should be one of coordination, and leveraging the resources of the corporation
Executing Global account management programs builds relationship with customers and allow for development of internal systems & interaction
Decision-making in global companies support the goal of treating the world as a single market
SBU
In summary the challenges for Global prorammes are:
1. Insufficient research
2. Over standardization
3. Inflexibility in planning and implementation
4. Not-invested-here syndrome (NIH)
5. Glocalization issues “think globally, act Locally”
Internationalization, planning & developing Key management challenges of international business
1. Import duties/tariffs (+) sale price and (-) sales
2. Requirement for natural resources, either import or set up factory beside them
3. Competition pushed you to (+) efficiency and (-) costs of production. Move production to a country were the four factors of production are cheaper. These factors are Land, Capital and resources
4. Transfer capital and investment in FDI occurs to take advantage of another economy’s competitive advantage
Global Market Entry Strategies Typical entry strategies include:
Exporting & importing Licensing Franchising Expansion through alliances Joint venture Foreign Direct Investment
Internationalization, planning & developing Decision – making tree 5 steps to FDI Step 1 what market? Domestic v Foreign Step 2 produce where? Export or FDI Step 3 who produces? License v Own Step 4 with whom? JV v Wholly owned Step 5 what to invest in? existing v Greenfield
investment
Thank you!!! Q&A