2 PRODUCT INTERNATIONALIZATION

= companies that want to expand beyond the domestic market and reach an international
 PRODUCT GLOBALIZATION
o is the process of adapting a product to meet the requirements and preferences of customers in
different countries and cultures
PRODUCT TYPOLOGY
1. DOMESTIC PRODUCTS
 on domestic market, especially where it is developed tourism, also regional products
2. EXPORT PRODUCTS
 delivered only to selected markets and their adaptation is implemented according to the
requirements of foreign markets or customers
 generally higher quality products for demanding markets
3. MULTINATIONAL PRODUCTS
 contain partial modifications according to the specifics of individual markets (e.g. package size)
4. GLOBAL PRODUCTS
 products for the widest segments of consumers
 completely standardized, differences between markets are only in packaging and instructions
ADAPTATION VS STANDARDIZATION
A. ADAPTATION
o whole range of issues from quality and appearance of products to materials, processing, production
equipment, packaging, style and modeling
o to meet the physical, social or mandatory requirements of a new market
o legal, economic, political, technological (technical norms etc.) and climatic requirements of a country
market often dictate some level of localization or adaptation
B. STANDARDIZATION
o product that can be used internationally without any changes across different cultures and countries
o means lower costs, increased production quantity and competitive price (competitiveness)

COMPETITIVE ADVANTAGE OF BUSINESSES

 competitiveness is basically made up of competitive advantage
 INTERNATIONAL COMPETITIVENESS: be able to assert and to compete with local companies on world markets
PORTER´S GENERIC COMPETITIVE STRATEGIES
= basis of above average profitability in the long run is sustainable competitive advantage
 COMPETITIVE ADVANTAGE
o LOW COST, DIFFERENTIATION
 COMPETITIVE SCOPE
o BROAD TARGET, NARROW TARGET
1. COST LEADERSHIP
 a firm sets out to become the low cost producer in its industry
 may include: economies of scale, proprietary technology, preferential access to raw materials
2. DIFFERENTIATION
 firm wants to be unique in its industry and in dimensions that are widely valued by buyers
 one or more attributes that many buyers in an industry perceive as important
3. FOCUS: choice of a narrow competitive scope within an industry
 selects a segment or group of segments in the industry and tailors its strategy to them
 cost/differentiation focus
 both strategies rest on differences between a focuser's target segment and other segments in the industry

INTERNATIONAL PRODUCT LIFE CYCLE

1. INTRODUCTION
o product successfully introduced into the national (and international) market
2. GROWTH
o the requirement for the merchandise will boost sales / production prices drop, and profits are high
3. MATURITY
o the merchandise is widely known and plenty of customers own it
o demand levels off and sales volume will increase slower
4. SATURATION = the sales volume are stable, neither increasing nor decreasing
5. DECLINE
o sales and revenues are decreasing, so it is not economically possible to continue creating the
merchandise
o production could shift to growing countries
BCG MATRIX
= an instrument for organizing company’s product/business portfolio
 QUESTIONMARKS (Introduction)
o the most upsetting quadrant, high development and market growth, low relative market share
o need a lot of money to keep their positions
 STARS (Growth)
o items with high relative market share and market growth,
leading position, profitable
 CASH COWS (Maturity) – deliver significant benefits, they don't need
as much investment to keep their position
 DOGS (Decline) – low developmen t, low profit
 ANSOFF MATRIX (1957)
 product /market expansion grid
 a tool used by firms to analyze and plan their strategies for growth
 four strategies that can be used to help a firm grow
 analyzes the risk associated with each strategy
1. MARKET PENETRATION S.
 increase its market share
o decreasing prices to attract new customers
o increasing promotion and distribution efforts
o acquiring a competitor in the same Marketplace
o improving the aftersale services

2. PRODUCT DEVELOPMENT
 new product to the existing market
o extensive research and development and expansion of the company’s product range
o investing in R&D to develop new products to cater to the existing market
o acquiring a competitor’s product and merging resources to create a new product that better meets
the need of the existing market
3. MARKET DEVELOPMENT
 enter a new market with existing products
o expanding into new geographic regions, customer segments
o catering to a different customer segment
o entering into a foreign market

4. DIVERSIFICATION
 a new market with a new product, the riskiest strategy
o RELATED DIVERSIFICATION
 potential synergies to be realized between the existing business and the new product/market
o UNRELATED DIVERSIFICATION
 no potential synergies to be realized between the existing business and the new
product/market