International Planning and Organization

The Process Planning is a systematized way of relating to the future. It is an attempt to manage the effects of the external uncontrollable factors on the firm’s strengths, weaknesses, and objectives to achieve a desired end. Definition Planning relates to the formulation of goals and methods of accomplishing them. Cateora & Graham Planning is both a process and a philosophy. Structurally, International planning may be viewed as • Corporate Planning – which is essentially long term and at the highest level, incorporating goals for the enterprise as a whole. • Strategic Planning – which is conducted at the highest levels and deals with products, capital, and research, and long and medium-term goals of the company. • Tactical Planning – or market planning, pertains to specific actions for allocation of resources used to implement strategic plans at the local level.

as is. to foreign markets. 2 . • Global Market Concept: The world is the market. The selection of any one of the approaches to internationalization produces different effects on the marketing mix.A major advantage to multinational enterprise involved in planning is the discipline imposed by the process. a standardized marketing mix is developed for entire set of country markets. • Multidomestic Market Concept: Each country is viewed as being culturally unique and an adapted marketing mix for each country market is developed. and the domestic marketing mix is offered. Evolution of a company’s objectives and resources is crucial in all stages of planning in international operations as these reflect the company’s commitment to international operations. A company’s International orientation can be characterized as one of the three operating concepts: • Domestic Market Extension Concept: Foreign markets are treated as extensions of the domestic market. and hence on planning and organizational strategies of the company. and wherever cost and culturally effective.

3 .The Planning Process Depending on the degree of involvement. Possibilities of standardization or adaptation are examined in this phase. company’s philosophies. four phases are involved: Phase 1 Involves Preliminary Analysis and Screening for matching company/country needs. strengths and constraining factors are matched with the potential of the target country market. Phase 4 Deals with implementation and control of the Plan. Phase 2 Involves adaptation of the Marketing Mix to target markets. In this part of the planning process. Phase 3 Involves developing the Marketing Plan.

Exporting The simplest form of foreign market entry is to export from the home country. continuous set of interacting variables with information continuously building among phases. any of the following Market-Entry strategies may be used. 4 . As a company expands into more foreign markets with several products. Market development is the easiest.The Process The planning process is a dynamic. Utilizing a strategic planning process encourages the company to consider all variables that affect the success of the Plan. The International Organization Depending on the degree of commitment of the company. the international marketing management begins to shape the organization to achieve its international/global strategies. risks are minimal and market skimming is possible to gain a foothold in the market.

the franchise system provides an effective blending of skill centralization and operational decentralization. and they permit expansion without great capital or personnel commitment. supervising. and management services. Joint Ventures A joint venture is a partnership of two or more participating companies that have joined forces to create a separate legal entity. capital. Not all licensing experiences are successful because of burden of finding. and inspiring licensees. Franchising Franchising is a rapidly growing form of licensing in which the franchiser provides a standard package of products.Licensing Licensing is used for use of Patent rights. systems. Licenses may be closely controlled or be autonomous. Trademark rights. and the franchisee provides market knowledge. Trade names and the right to use technological process. Potentially. and has become an increasingly important form of international marketing. 5 . and personal involvement in management.

or government. but have two different characteristics: • They involve a large number of participants. Consortia Consortia are developed for pooling financial and managerial resources to lessen risks.Joint ventures are to be distinguished from other strategic alliances. and not individuals. and are characterized by four factors: • JVs are established as separate. • Partners share the management. • Equity positions are held by each of the partners. Companies join hands to broaden their merchandize offering to gain market entry and better efficiency. 6 . Consortia are typically developed to pool financial and managerial resources and to lessen risks. chartered organizations. • Partnerships are between legally incorporated entities like companies. • They frequently operate in a country or a market where none of the participants is active. legal entities. Consortia are similar to JVs.

This is a consequence of lower trade barriers and advantages of cost effectiveness.Foreign Direct Investment In order to avail comparative cost advantages. 7 . a firm may invest in or buy local companies or establish new operations facilities in any of the modes describes above. increasing number of multinationals have used this mode for entry in foreign markets. increasing use of credit card applications may stimulate such sales. Although full impact of Internet on international trade is yet to be determined. Although Internet marketing initially focused on domestic markets. The hallmark of global companies today is the establishment of manufacturing facilities throughout the world. The Internet The Internet is becoming increasingly important as a foreign entry mode.

but most fit into one of the three categories: • Centralized • Regionalized • Decentralized Each system has its own merits or demerits. and centralization of all information and records. sources of natural and personnel resources. length of chain of command. It is thus difficult to devise a standard organizational structure. centralization. and type or level of marketing involvement. level of policy decisions. The main advantages of a centralized system are availability of experts at one location. 8 . ability to exercise a high degree of control.Organization of International Operations The organizational plan includes the type organizational arrangements to be used. organizational plans will depend on size. On account of company-specific characteristics. support staff. Locus of Decision A number of organizational models exist. degree of control.

Some companies practice decentralization by using competent managers and giving them full responsibility for national or regionalized operations. The Structure The international operations may be structured around the product function. several global companies seek to combine the economies of scale of an international operation with the flexibility and marketing knowledge of a local company. ********** 9 . depending on the size of operations and company objectives. or the geographic location of activities. While no single organizational plan is adequate. Studies indicate that even though the product functions may be highly centralized. subsidiaries exercise considerable amount of local influence in marketing mix decisions.

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