Motives of internationalization

Transcription

1 International Marketing Management Part2 Motives of internationalization 1

2 Deciding Whether to Go Abroad-Major Motives for Being Global Proactive motives strenghts opportunities Reactive motives weaknesses threats Deciding Whether to Go Abroad-Major Motives for Being Global Proactive motives Profit and growth goals (potential) Goverment s Stimuli Technology competence Unique product Information on foreign opportunities Economies of scale Tax benefits Reactive motives Competitive pressure Domestic market limited in size Domestic market saturated Overproduction (excess capacity) Unsolicited foreign orders Seasonability in demand Proximity to international markets 2

3 Market Expansion Strategies Incremental (experimental)entry first a single key market to get some experience and then entering other markets one after one;...calledwaterfall approach Simultanous entry a numer of market at the same time to laverage core competences and to get a strong global position in a short time;... calledshower approach The form of the firm s response to global market opportunities depends greatly on the management s assumptions or beliefs, both conscious and unconscious, about the nature of doing business around the world! This worldview of a firm s business activities can be described as the EPRG framework. 3

4 EPRG Framework Ethnocentric: home country is superior and the needs of the home country are most relevant Polycentric(multidomestic): each country is unique and therefore each country should be targeted in a different way Regiocentric: the world consists of regions, e.g. Europe, Asia..., the firm triesto standarizeitsmarketing programmewithinregions, but not across them Geocentric(global): the world is getting smaller and smaller. The firm may offer global product concepts but with local adaptation ( think global, act local ) Ethnocentric Orientation Domestic market is the most important Foreign market as additional market Product life cycle & cost reduction Strategy: let s do the same, the same way but somewhere else Standardized marketing decisions & operations 4

5 Polycentric orientation International market as important as domestic market Very intensive marketing operations Market consists of many separated foreign markets Regiocentric orientation International market as important as domestic market Veryintensivemarketing operations basedon similiaritiesamonggroupsof markets Standardized strategies at the regional level plus a lot of independence in regions 5

6 Geocentric orientation One international (global!!!) market There are no important differences.. Strategy, enter modeand operations arestandardizedalloverthe World Adv: costs, quality, customerpreferencescreation, creationof competitive advantage Dual glocal orientation Marketing ismostlystandardized, but whenit sneeded-adaptedto local environment. Thinkglobal actlocal?????????? 6

7 Typology of International Marketing Strategies Low Industry Globalisation Level High Branded hidden master cooperation born global Type of Sales Anonimous Robbery anonimous manufacturer hit and run Hidden master strategy involves entering foreign markets sequentially, after carefully selecting them, the sale of products is carried out under its own brand, in order to discount the competitive advantage of domestic market 7

8 Hidden master - basic assumptions Building the company's position in the domestic market Multiphase assessment of the attractiveness of foreign markets Limited quantity of selected foreign markets to service The entry strategy - direct export A careful choice of partner Building a strong brand in a foreign market The specific segmentation and target market selection Adaptation to the specific foreign market Hidden master - advantages An ambitious strategy -striving to gain market leadership in the market supported Make full use of market opportunities that result from the competitive advantage of small and medium-sized enterprises and the nature of the market served Full control over the sale of products on foreign markets Gradually increasing involvement in foreign markets 8

9 Hidden master - disadvantages Time-consuming (this follows from the sequential entering foreign markets) Cost prohibitive (it is connected with the building of a strong brand, not only in domestic market but also overseas) Risky (focusing on niche market) Cooperation strategy 9

10 Cooperation strategy The strategy of "cooperation" as hidden master" sequentially enter foreign markets, after their careful choosing, but the entrance is implemented jointly by the companies offering the same product, it is usually performed under regional brand(or shared) Cooperation- basic assumptions Horizontal integration of producers (functional) Building a strong brand name (common or regional) in the domestic market and later on foreign Other decisions related to the presence in foreign markets take joint company engaged in foreign trade 10

11 Cooperation strategy- advantages Building a position on foreign markets on the basis of shared / regional brand Cheaper and less risky way to enter foreign markets than the strategy of hiddenmaster" Avoiding cross-market competition Cooperation strategy- disadvantges Real control over marketing activities in foreign markets may get a common business Reduction of operational flexibility shareholders This solution works in the markets of homogeneous products 11

12 Anonymousmanufacturer Strategy "anonymous manufacturer is a passive entry into foreign markets by establishing cooperation with foreign company for which the product is produced, which is then sold under the brand name of business partner "anonymous manufacturer basic assumptions 1. Entrance to the foreign market is through export processing or indirect 2. A careful choice of partners (foreign or domestic) 3. The choice of foreign markets is secondary 4. Use of the production efficiency and lower cost 5. Almost all marketing activities are planned and implemented by partner 6. The company's marketing activity boils down to look for a partner, negotiating terms and sign a cooperation agreement 12

13 "anonymous manufacturer - advantages Cheaper and easier way to enter foreign markets than previous strategies Adjusting the offer to the specificities of the country It can be the starting point for a more active stance on foreign markets Low degree of risk in the short term "anonymous manufacturer - disadvantages The passive strategy, the company misses the experience of conducting marketing activities in foreign markets Sales faceless -no relationship with the final customer The risk associated with the continuation of cooperation in the future (cost, quality) Low profit per unit -a weak bargaining position 13

14 Hit and run strategy Hit and run strategy it is often a one-time export transaction in the country, which is associated with a product of low quality parameters and offered the average market prices Hit and run basic assumptions Select the country -the company has so far not sell there product A one-time deal with high profitability The use of brand imitation Offering a product of low quality parameters (often unacceptedon the domestic market) Determining the level of average prices on the market 14

15 Hit and run -advantages Highly profitable strategy in foreign markets in the short term Getting rid of the stock! Hit and run - disadvantages Image of the brand / supplier / country of origin at a low level quality It is not possible to build a long-term position on foreign markets It is unethical strategy 15

16 Born global Strategy born global" is used by companies operating in industries with a high degree of globalization and offering innovative products that almost from the very beginning are focused on customer service (segments) in terms of global, without isolating domestic markets Born global basic assumptions 1. Innovative product related to the market with a high degree of globalization 2. You creating international networks of suppliers, distributors and buyers 3. Building a strong brand in a foreign market 4. Joint segmentation and target market selection 5. The high degree of standardization activities instrumental in a geographical 6. The wide use of the Internet for marketing 16

17 Born global- advantages An ambitious strategy -striving to gain market leadership in the serviced market Full control over the sale of products on foreign markets Networking marketing Born global- disadvantages Cost prohibitive (this is related to the building of a strong brand in the global market) Profitability realizable in the long term Risky (high degree of dependence on partners in the network marketing) The company must have a product offering a high degree of innovation 17

18 Market Expansion Strategies Incremental (experimental)entry first a single key market to get some experience and then entering other markets one after one;...calledwaterfall approach Simultanous entry a numer of market at the same time to laverage core competences and to get a strong global position in a short time;... calledshower approach 18