Global Marketing Management A European Perspective Global Competition
Global Marketing Management A European Perspective Global Competition and Strategy Warren J. Keegan Bodo B. Schlegelmilch
Overview z Dimensions of Global Competition z National Competitive Advantages z Industry Analysis: Five Forces Model z Analysis of Industry Groups z Competitive Advantages of Individual Companies z Summary Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 2
Learning Objectives z Understanding the importance of corporate strategies of a company z Appreciating the determinants for selecting, creating and pursuing a particular strategy z Knowing the levels of examining corporate strategy and the competitive position of a firm z Knowing why different companies pursue different strategies Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 3
Global Competition and Strategy: Important Concepts z The National Diamond z Five Forces Model z Generic Strategies z Playing the Spread z Strategic Groups z Hypercompetition Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 4
Dimension of Global Competition z A company`s success in global markets is determined by its ability to establish competitive advantages z Forces influencing competition in an industry need to be examined z Analysis of a firm`s position within an industry is important Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 5
National Competitive Advantage: Determinants of National Advantage Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 6
National Competitive Advantage: Factor Conditions z Human Resources z Physical Resources z Knowledge Resources z Capital Resources z Infrastructure Resources z Alternative Categorisation of Factors Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 7
Demand Conditions, Related and Supporting Industries z Home-market demand conditions are important y. Composition of home demand y. The size and pattern of growth of home demand z Internationally competitive suppliers provide inputs to downstream industries z Contact and coordination give access to foreign markets Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 8
Firm Strategy, Structure, and Rivalry z Differences in management styles, organisational skills and strategic perspectives create advantages and disadvantages for firms z Domestic rivalry has a powerful influence on competitive advantage, because it keeps an industry dynamic and creates pressure to improve and innovate z Intensity of competition and quality of competitors are important Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 9
Other Forces Acting on the Diamond z Chance y. Occurrences that are beyond the control of firms z Government y. Buyer of products and services y. Policy maker of policies on labour, capital formation and product standards z Other Non-market factors y. Interest groups, activists and the public Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 10
Dimension of Global Competition Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 11
Industry Analysis z Five Forces Model Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 12
Industry Analysis z Threat of new entrants z Threat of substitute products z Bargaining power of suppliers z Bargaining power of buyers z Rivalry among competitors Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 13
Analysis of Industry Groups z Map of Strategic Groups in a Hypothetical Industry Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 14
Characteristics of Strategic Groups z Mobility Barriers y. Limit access to specific industry and switch between strategy groups z Varying level of bargaining power with consumer and supplier z Threat of Substitutes y. Companies serving special needs are less vulnerable Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 15
Competitive Advantage of Individual Companies (1) z Generic strategies for creating competitive advantages Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 16
Competitive Advantage of Individual Companies (2) z Broad Market Strategies y. Cost-Leadership Advantage y. Differentiation y. Narrow Target Strategies y. Focused Differentiation y. Cost Focus y. Playing the Spread Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 17
Competitive Advantage of Individual Companies (3) Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 18
Strategic Perspectives z Layers of Advantage y. Less risks if wide portfolio of advantages exist z “Loose Bricks” left in the defensive walls of competitors who are focused on a market area z Changing the Rules y. Refuse to play by the rules set by industry leaders z Collaborating y. Using know-how developed by other companies Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 19
Hypercompetition z Porter`s models only provide snapshots of competition z “Hypercompetition” describes a dynamic, competitive world, in which no action or advantages can be sustained for long z The only advantage of a companies is to manage dynamic strategic interactions: Cost-quality, timing and know-how, entry barriers and deep pockets z Companies must seek unsustainable advantages Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 20
Summary z Various Factors are helping industries and countries to achieve competitive advantage z Porter`s five Forces Model z Groups of companies may follow similar strategic dimensions z Focusing on the individual strategy of a company, an understanding of the unique source of the firm`s competitive advantages is of great importance Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 10 / 21
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