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International And Global

Marketing
Internationalization theories and developing of the
firms
international competitiveness

Suhard Amit
MBA RMIT ( Aus )
Dip Business Management ( Aus )
ternational And Global Marketing Content outline

Weekly Content TOPIC

Introduction to the module


Week 01
Global marketing in the firm and the initiation of internationalization

Week 02 International/global marketing research

Internationalization theories and developing of the firms


Week 03
international competitiveness

Week 04 The international/global business environment

International/global market selection process and Export,


Week 05
intermediate and hierarchical entry methods

Week 06 International/global marketing mix

Week 07 International/global marketing mix (continued)

Week 08 Organization and control of the global marketing programme

Week 09 SESSION 9 CASE STUDY

Week 10 SESSION 10 CASE STUDY


New school of thought on strategy..

In the business world Porter, M, (2010)


Argues that strategy is "about
being different."
Its about finding a competitive position,
to differentiate yourself in the
eyes of the customer

Strategy means deliberately


choosing a different set of activities to
deliver a unique mix of value.

Strategy is about competitive


position.He defines it as a
combination of the ends (goals) for
which the firm is striving and the
means (policies) by which it is seeking
to get there.

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Thinking Strategically

Competing to be the Competing to be


best Unique

Mimicking Doing what rival


strategies of the firms dont or what
industry and its they cant
competitors

The worst error in strategy is to compete with Competitor on the same dimensions

Arthur A Thomson, (2010) Strategy is Competing


differently."

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Competitive Advantage

Actions to strengthen firms bargaining


Low cost base position with Suppliers, Distributors and
Eg. Walmart Others
Actions to acquire competitive resources
Actions to strengthen market standing
and competitiveness by acquiring or
merging with other companies

The Ability to meet customer needs more


Competitive effectively with products or services that
Advantage customers value more highly or more
efficiently than competition

Actions to gain sales and market share via


more performance features, appealing
Differentiation design, better quality or customer
Eg. Godiva Belgium service, Wider product range
Actions and approaches used in managing
R&D, Production, Sales and Marketing and
Finance

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Differentiation theory..

According to: Kuss/Tomczak

Price-/volume- Stuck in the middle Preference-


strategy strategy

Purchase, because No purchase, because Purchase, because


it's cheaper! It's neither cheaper it's better
nor better!

Efficiency
(ROI,
Cash flow)

Performance advantage

Price advantage

Positioning: The process of communicating a brand or a organization to


the target customers in such way that they can easily recognize where
it fits with competing products and organizations
Strategy Canvass Yellow Tail

High

Premium Wines Create


/ Raise

[yellow tail]
offering level

Budget Wines

Eliminat
e/
Reduce

low
Use of enological Above-the- Aging Vineyard Wine Wine Easy Ease of Fun &
Price terminology line prestige
and distinctions marketing
quality
and legacy
complexity range drinking selection Adventure
in wine
communication

W Chan Kim and Renee Mauborgne


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IKEA Model
A unique value proposition compared to other
organizations

1. What customers are we trying to serve ?


2. What needs are we trying fulfill ? Products, Features or
Service
3. What relative price ? High, Mid or low

A distinct value chain embodying choices about


how the
organization will operate differently to deliver its
uniqueness

Making clear tradeoffs, and choosing what not to


do
Connecting the activity system
Continuity
Knowing what the company should do and what it should
not do

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McDonalds Case study..

Improved Employee training programs via company owned


restaurant and managed Hamburger University
operations Build leadership and operational capabilities

In 2010 McDonalds
Reduced operational cost and corporate expenses
was setting new
Renegotiating advertising contracts with media and
sales records
Affordable Pricing Press
despite a global
Replaced company owned vehicles with more fuel
economic slowdown
efficient models
and declining
Dollar menu pricing US / 100 Yen Menu Japan
consumer
confidence in the
United States. Grilled chicken salads, Chicken snack wraps,
Wide Menu
variety and Sandwiches, Lemon Shrimp burgers, Premium range
More than 60 of coffee Espressos, Cappuccino's and lattes good
beverage choices
Million customers as Star bucks
visited one of the
MC 32,000
restaurants in 117
countries each day 24 Hours drive through, Double drive through lanes,
which recorded Convenience 25,000 new locations
$22.7 Billion
revenue

One of the few


companies to be International Russia / China 125 new outlets / Included local
listed on the DOW Expansion menu and taste
Jones index during
the year that made
profits and growth
during the global
McDonalds Video
Group Discussion

What are the challenges for MD in implementing there global strategy ?

What are the key differentiation factors adopted by MD ?

Discuss global customization techniques used by MD


Support Activities
The Value chain system

Primary activities
Directly involved in delivery of a product or service

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Cost drivers of the value chain of an
organization

Economies of scale
Learning
Capacity utilization
Linkage among activities
Inter-relationships among business units
Firms policy of cost or differentiation
Geographical location
Institutional factors (regulation, union activity,
taxes)
Core competencies

Core competencies refer to the value chain activities in which


the firm is regarded as better than competition
Core competencies

Core competencies refer to the value chain activities in which


the firm is regarded as better than competition
Group Discussion

Discuss the value chain for Srilankan Airlines. What are the
key elements in the value chain ?

Discuss the value chain for Air Asia budget air line. What
are the key elements in the value chain ?
Competitive advantage begins with..

Successful organizations tries to answer


03 critical questions

1. Who is the customer I'm trying to serve ?


2. What are the needs / problems to solve ?
3. At what price to offer my solution ?

Do all above better and differently than the


Competitors..

If you can answer the above 03


questions
well, Then you have Marketing strategy
!
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The competitive advantage cycle

Do we generate customer value


/ competitive advantage from
Step 1. our ;
Sourceof Superior assets
Competitive Super Capabilities
Advantage Key Success Factor

Is it unique to us ?
Step 2. Easy or difficult to copy ?
Barriers to Imitation Does the competition have the
same thing ?
The competitive advantage cycle

Operational Excellence
Step 3. Product Leadership
Value proposition Customer Intimacy
of competitive Innovations
advantage Product Performance

Value marketing
Step 4. Focus on core competition
Establishment of Features, Advantages and
competitive
Benefits
advantage

Competitive Advantage Model

Resources

Cost
advantage Value
Distinctive
Competencies Or Creatio
n
Differentiation
advantage
Capabilities
Critical success factors

Critical success factors (CSF)


Factors that facilitate the
growth or success of an
organisation (only critical
ones)
Identifying CSF is a skilled
process
Helps to focus effort
CSF should be linked /
translated to objectives
CSF will help you
determine key
performance indicators
(KPI) of a business

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Break 15 Min
Corporate Expansion strategies

Expansion strategies

Key focus is to grow using


its resources and know
how, this is the most
popular strategy for many
firms

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Expansion strategies; (1) Concentration
strategies

Selling more Selling to a Product


of the same different development,
product in market or line
same markets different need extensions,
Increase state new products
usage & to attract
frequency more
Get new customers or
customers get current
Get customers to
competitor buy more
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Expansion strategies;
(2) Integration Supplier
strategies Business

Vertical / backward
Integration

Market segments
A B C D E F
Product offering

Product Development
1 Market Development
Business Horizontal Horizontal Business
outside Diversificatio 2 Integratio
industry n within
n
3 industry

5
Forward /
6 Vertical
integratio
n

Buyers
business Suhard Amit@ Next BS MB
Expansion strategies; (3) diversification
strategies

Diversification to Diversifying into


related areas / unrelated areas of
related business
diversification
Unrelated
Use existing skill diversification
sets
Needs new skills
sets

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Expansion strategies; (4) Cooperation
strategies
Strategic alliances Joint ventures

1. Working with other 1. Combining two or more


organizations organizations into one entity
to achieve a specific
2. Partnership between objective
two or more 2. Can be time bound or open
organizations that
unite to pursue a set of
agreed goals but
remain independent
3. Possible between non
competing and
competing
organizations
Mergers and acquisitions

1. Merger two or more organizations get together as a


new organization, previous organizations dissolves
2. Acquisition one organization buying over another

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Expansion strategies; (5) Internationalization
strategies

Multi Domestic P&G, Unilevers / Uk and Netherlands


Global strategic decisions Good hope. Transnational continents
1. Which markets to enter
2. Timing of entry Transnational - Asia, Africa, North
3. Scale of entry America, South America, Europe,
Regionalization strategies Australia, and Antarctica
1. How to differentiate strategy /
operations by region to compete
better
Competition of local
organizations
1. All firms are global?
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Expansion strategies; (6) digitalization strategies

E-commerce, e-learning, e-banking


have opened up new opportunities /
products
Changing transaction patterns
Brick & mortar on line distribution
as opposed to physical distribution
E-portals intermediaries offering
various services
End to end digital services

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Group Discussion

Select an organization of your choice and discuss 3


corporate expansion strategies for global entry.

What are the advantages and disadvantages of the


selected strategies ?
Competitive advantage
Competitive advantage

Specific advantage
owned by the
organisation over its COMPETITIVE ADVANTAGE
competitors that help
them maximise Lower Cost Differentiation
business results (Industry-wide)

Cost Leadership Differentiation


Broad
COMPETITIVE SCOPE

Uniliver Apple

Walmart Samsung
Johnson & Johnsons baby
Body Shop
(Segment specific)

Focused
Cost Focus
Differentiation
Narrow

Mont Blanc
E bay
Victoria Secrets
Amazon
Rolex
BMW

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Cost Leadership
COMPETITIVE ADVANTAGE
Linkages and relationships
Lower Cost Differentiation
COMPETITIVE SCOPE

(Industry-

Cost Leadership Differentiation


Broad

Activities linked together to


wide)

Cost leadership

produce cost savings


(Segment specific)
Narrow

Cost Focus Focused


Differentiation

Air bus industries share production


across specialized contractors which
produce cost saving
Infrastructure
Just in time supply Reduce
Availability of skills stockholding cost and the need for
Organizations located outside the large warehouses
city often find it difficult to recruit
and retain staff because they Economies of scale
prefer to work in the city
Large volume of production
Government grants and funding ( generate cost savings and
BOI ) Low tax structures efficiencies

Technological advances Bulk or volume purchase


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Differentiation
COMPETITIVE ADVANTAGE
Product Perception
Lower Cost Differentiation
COMPETITIVE SCOPE

(Industry-

Cost Leadership Differentiation


Broad

Perceived product benefits


wide)

Differentiation
(Segment specific)

Perceived life style of the product


Narrow

Cost Focus Focused


Differentiation

Aspirations

Product Augmentation Product Performance

The basic product offering is The Actual performance of the


enhanced by adding value adding product
elements
Quality
The level of after sales services
Durability
Technical support
Capability to improve performance
Easy access to finance

Open Hours for operation


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Elements of Product Design - Vehicles

Potential Product Core product Benefit:


The basic function or need met by the
Augmented Product Product Eg. The need for Transportation

Fast Delivery
Actual Product:
Credit
Actual Product Also called the tangible or formal product
Features Eg. The car, brand name / Quality /
Packaging / Design / Features
Design
Core product /
Benefit Warranty Augmented product
Service
The add ons or extras / Value additions
Quality
Brand Name

Packaging Potential product


Potential for what the product could
be in the future
Repairs

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Focused Differentiation

COMPETITIVE ADVANTAGE
Geographic segmentation
Lower Cost Differentiation
COMPETITIVE SCOPE

(Industry-

Cost Leadership Differentiation


Broad

Production is based on the needs of


wide)

the local market segment


(Segment specific)
Narrow

Cost Focus Focused


Focused
Differentiation
Differentiation Will compete in a particular market
or channel selected ( Intensive /
Selective / Exclusive )
Products and service
specialism End user focus

Highly differentiated, Niche or The focus is on the specific needs


premium products of the end users

Ex, Steinway Pianos , Porsche, Can profile the customers


Rolex
Long term loyalty can be met
High priced

High service orientation Suhard Amit@ Next BS MB


Cost Focus

COMPETITIVE ADVANTAGE
Geographic segmentation
Lower Cost Differentiation
COMPETITIVE SCOPE

(Industry-

Cost Leadership Differentiation


Broad

Secure a territory and maintain


wide)

competitiveness
(Segment specific)
Narrow

Cost Focus Focused


Cost Focus Differentiation

Selected geography and channel

Products and service End user focus


specialism
Not concerned on the needs of the
Low cost products segment

Limited options in portfolio Produce as cheaply as possible

No / Low service orientation Less spend on Marketing and


services
Test market

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Group Discussion

Select an organization of your choice and discuss the


generic strategy adopted by the company ?

Discuss if the company needs to change its strategy based


on your learning's today
What is Benchmarking?
Benchmarking means to measure the best practices
of leading businesses, and learn and adapt them for
use in your business.

"Improving ourselves
by learning from
others."
Competitor Benchmarking
Technique for assessing relative market
place performance compared to another
competitor or a set of competitors
Benchmarking is the
practice of being
humble enough to
admit that someone
else is better at
something and wise
enough
American to try
Productivity and and
Quality
Center-1988
learn how to match
and even surpass them
Why Benchmarking ?

Performance
Improvement

Meeting Creative
Quality Thinking
Standards

Benchmarking
Innovation Keep Pace with
In Science and
Management Technology
Methods Changes

Cope with Meeting


Competitive Customers
Markets Expectations
Three Major Benefits of
Benchmarking
Product and Process
Improvement

Cost Competitive
Reduction Strategy
Benchmarking Methodology
Look for Benchmarking Opportunities
Everywhere

Best Practice
Overlap Competitive
Industry leaders
Top performers with
similar operating
characteristics

Functional Internal
Top performers Top performers
regardless of industry within company
Aggressive innovators Top facilities
utilizing new within company
technology