INTERNATIONAL MARKETING MANAGEMENT SESSION 14 DEVELOPING GLOBAL MARKETING

INTERNATIONAL MARKETING MANAGEMENT SESSION 14: DEVELOPING GLOBAL MARKETING STRATEGY: FOCUSED STRATEGIES 1

A FRAMEWORK FOR GLOBAL STRATEGY Position and Resources of Business and Parent Company Global Strategy l Geographic Scope l Market Scope (Segmentation) l Product Lines Industry Globalization Drivers l l Market Economic Environment Competitive l Degree of Strategy Integration Benefits/ Costs of Globally Integrated Strategy Organization’s Ability to Implement a Global Strategy 2

EXTERNAL DRIVERS OF INDUSTRY POTENTIAL FOR GLOBALIZATION Market Factors Homogeneous market needs Global customers Shortening product lifecycle Transferable brands and advertising l Internationalizing distribution channels l l Economic Factors Environmental Factors l Worldwide economies of scale l l in manufacturing or distribution Steep learning curve Worldwide sourcing efficiencies Significant differences in country costs Rising product development costs Potential for Global Strategy l l Falling transportation costs Improving communications Government policies Technology change l Competitive interdependence among countries l Global moves of competitor l Opportunity to preempt a competitor’s global moves Competitive Factors 3

ACHIEVING GLOBAL SYNERGIES LEVERAGING ASSETS AND POSITION n n n Scale Efficiencies Coordination and Integration Transfer of Ideas, Experience and Know-how STRATEGIC FLEXIBILITY n Global Strategy Production Shifting n Multiple Sourcing n Transfer Pricing n Managing Cash Flow 4

COMPETITIVE STRATEGIES IN A GLOBAL INDUSTRY n io Reg try n Cou Degree of Integration HYBRID Broad. Based Locally Responsive Globally Integrated National Niche Global Segment MARKET SCOPE Focused 5

THE GEOGRAPHIC SCOPE OF THE MARKET Level of Market Integration Geographic Coverage CITY COUNTRY REGION WORLD CITY COUNTRY Urban Multi-Urban Regional. Urban International. Urban Domestic Restricted Multi-Domestic Regional Multi-Region REGION WORLD Global 6

FOCUSED SEGMENT STRATEGIES National Niche Strategies Global Segment Multiple Global Segments e. g. Schweppes e. g. Rolex, Benetton e. g. L’Oreal 7

FOCUSED STRATEGIES ADVANTAGES n Customer Focused n Clearly Defined Position n Limited Resource Needs CHALLENGES n How to Grow n Remaining Focused n Responding to Market Changes 8

IMPLICATIONS n Need to determine market scope and degree of strategy integration n Global focused strategies provide clear direction but pose growth issues n Broad-based strategies typically more complex and pose integration challenges 9