Global” Global Strategies are rare Coca-Cola McDonalds Other companies
factors that drive industry globalization Formulation of global strategies at the microeconomic, corporate, level. Unique risks associated with operating on a global scale and how to mitigate those risks.
regions are more efficient than others in producing goods
• Industry Advantages • Other Industries
is the natural outcome of economic forces.
• Semiconductor industry
• Natural vs. Created
and Supporting Industries Competitiveness in the Home Industry • Porters 5 Forces (chapter 3)
• deregulation • Local, regional, national
• Outside the control of the firm
that push companies to think more globally to challenge competition Regional or global similarity in product or service calls for a global product. • Ex. Coca Cola and adapting to local markets
Branding and Marketing important to success
sales volume required for cost efficiency no longer available in one country Economies of Scale have become critical for Global success. This creates need for critical mass in different parts of the value chain • Ex. Pharmaceutical companies and R&D
potential of an industry influenced by competitive drivers such as: • (1)High levels of trade • (2)Competitor’s Diversity • (3) Interdependence created between competitive
Useful Questions: • Do we face the same principle competitors in
different parts of the world? • How many competitive arenas does our company compete in?
Industries regulated more than others
• Ex. Steel Industry and barriers
paying attention to nonmarket dimensions Leads to companies trying to shape the global competitive environment to their advantage
are Five additional Dimensions which are: (1) Market Participation (2) Standardization/Positioning (3)Activity Concentration (4) Coordination of Decision Making, and (5) Nonmarket Factors.
companies can afford to enter all markets open to them. Distinguish between “must” markets and “nice-to–be-in” markets • Must: compete in to realize global ambitions
of international expansion is dictated by customer demand
• Ex. Toyota Prius release date in Japan and U.S.
(Volume perspective) • Nice-to-be-in: participation is desirable but not critical
motivations for standardization: Reducing cost and enhancing quality Adopt a more global market positioning
• Not necessarily mean standardizing all elements of
use of global branding helps build in brand recognition, enhance customer preference and reduce worldwide marketing cost • Ex: Nestle, Coca-cola, Ford, IBM and Disney
the marketing mix, but by applying a global cost benefit approach to formulate the market strategy and seek balance flexibility with uniformity
OFFER Global Message TAILORED Global Change
(Marketing) Mix: Strategy under which both the offer and the message are the same • Are relatively rare because only a few industries are
truly global • This applies when: Product's usage patterns and brand potential are homogeneous on a global scale, when scale and scope cost advantages substantially outweigh the benefits of partial or full adaptation, and when competitive circumstance are such that a long-term sustainable advantage can be secured using a standardize approach
Global Offer: strategy characterized by and identical offer but different positioning around the world • Applies when fixed costs associated with the offer are
high, when key core benefits offered are identical, and when there are natural market boundaries •...