Global Marketing Management, 5e
1
Chapter 8
Global Marketing
Strategies
Copyright (c) 2009 John Wiley & Sons, Inc.
Chapter 8
Chapter Overview
2
1.
2.
3.
4.
5.
6.
Information Technology and Global Competition
Global Strategy
Global Marketing Strategy
R&D, Operations, Marketing Interfaces
Regionalization of Global Marketing Strategy
Competitive Analysis
Copyright (c) 2009 John Wiley & Sons, Inc.
Chapter 8
Introduction
3


On a political map, country borders are clear as ever.
But on a competitive map, financial, trading, and
industrial activities across national boundaries have
rendered those political borders increasingly
irrelevant.
Not only firms that compete internationally but also
those whose primary market is considered domestic
will be affected by competition from around the
world.
Copyright (c) 2009 John Wiley & Sons, Inc.
Chapter 8
1.
Information Technology and
Global Competition
4





Today, we are observing the emergence of a gross
information product, and it dwarfs the gross domestic
product.
Electronic Commerce (e-Commerce)
e-Company
Faster Product Diffusion
Global Citizenship
Copyright (c) 2009 John Wiley & Sons, Inc.
Chapter 8
2. Global Strategy
5

Global strategy consists of five
conceptualizations:
1.
2.
3.
4.
5.
Global industry
Competitive industry
Competitive advantage
Hypercompetition
Interdependency
Copyright (c) 2009 John Wiley & Sons, Inc.
Chapter 8
2. Global Strategy
6

Global Industry:
 Those
industries where a firm’s competitive position in
one country is affected by its position in other
countries.
 The first question that faces managers is the extent of
globalization of their industry.
 Every industry has global or potentially global
aspects.
Copyright (c) 2009 John Wiley & Sons, Inc.
Chapter 8
2. Global Strategy
7

Industry Globalization Forces (Exhibit 8-1):
Four forces interact to determine the potential of industry
globalization.
1. Market forces
2. Cost forces
3. Government forces
4. Competition forces
Copyright (c) 2009 John Wiley & Sons, Inc.
Chapter 8
Exhibit 8-1: Industry Globalization Drivers
8
Copyright (c) 2009 John Wiley & Sons, Inc.
Chapter 8
2. Global Strategy
9
Market Forces
1. Per capita income convergence
2. Rich consumers in emerging markets
3. Revolution in communication technology
4. Organizations behaving as global customers
5. Growth of global and regional channels
6. Establishment of world brands
7. Spread of global and regional media
Copyright (c) 2009 John Wiley & Sons, Inc.
Chapter 8
2. Global Strategy
10
 Cost
Forces
1. Global economies of scale and scope
2. Steep experience curve
3. Global sourcing efficiencies
4. Favorable logistics
5. Difference in country costs
6. High product development costs
7. Fast-changing technology
8. Shorter product life cycles
Copyright (c) 2009 John Wiley & Sons, Inc.
Chapter 8
2. Global Strategy
11


Government Forces
1. Favorable trade policies
2. Compatible technical standards
3. World Trading Regulations
4. High growth/low labor cost developing countries
5. Deregulation/privatization of industries
Competitive Forces
1. High exports and imports
2. Competitors from different continents and
countries
3. Interdependent countries
4. Globalized competitors
Copyright (c) 2009 John Wiley & Sons, Inc.
Chapter 8
2. Global Strategy
12

Competitive Structure
 Cost leadership
 Product differentiation
 Niche strategy
 Nature of Competitive Industry Structure (Exhibit 8-2):
»Industry competitors
»Potential entrants
»Bargaining power of suppliers
»Bargaining power of buyers
»Threats of substitute products or services
Copyright (c) 2009 John Wiley & Sons, Inc.
Chapter 8
Exhibit 8-2: Nature of Competitive Industry
Structure
13
Copyright (c) 2009 John Wiley & Sons, Inc.
Chapter 8
2. Global Strategy
14

Gaining Competitive Advantage
 Creative
destruction
 First-mover advantage versus first-mover disadvantage
 Competitor-focused approach
 Customer-focused approach
Copyright (c) 2009 John Wiley & Sons, Inc.
Chapter 8
2. Global Strategy
15

Interdependency:
 Interdependency
of modern companies
 Example: Global computer industry
 Governments also play a larger role, affecting parts of
the firm’s strategy.
Copyright (c) 2009 John Wiley & Sons, Inc.
Chapter 8
3. Global Marketing Strategy
16

Benefits of Global Marketing:
 Cost
Reduction
 Improved Products and Program Effectiveness
 Enhanced Customer Preference
 Increased Competitive Advantage

Limits to Global Marketing:
 Standardization
vs. adaptation issues
 Globalization vs. localization
 Global integration vs. local responsiveness
 Scale vs. sensitivity
Copyright (c) 2009 John Wiley & Sons, Inc.
Chapter 8
3. Global Marketing Strategy
17


Not every element need be standardized to the same
degree (Exhibit 8-3)
Degree of product standardization varies widely
based on many factors (Exhibit 8-4)
Copyright (c) 2007 John Wiley & Sons, Inc.
Chapter 8
Exhibit 8-3: Variation in Content and
Coverage of Global Marketing
18
Copyright (c) 2009 John Wiley & Sons, Inc.
Chapter 8
Exhibit 8-4: Degree of Standardizability of
Products in World Markets
19
Copyright (c) 2009 John Wiley & Sons, Inc.
Chapter 8
4. R&D, Operations and Marketing
Interfaces
20


R&D/Operations Interface
Operations/Marketing Interface
 Core
Components Standardization
 Product Design Families
 Universal Products with all Features
 Universal Product with Different Positioning

Marketing/R&D Interface
Copyright (c) 2009 John Wiley & Sons, Inc.
Chapter 8
Exhibit 8-5: Interfaces among R&D,
Manufacturing, and Marketing
21
Copyright (c) 2009 John Wiley & Sons, Inc.
Chapter 8
5. Regionalization of Global
Marketing Strategy
22

Regional strategies are the cross-subsidization of
market share battles in pursuit of regional production,
branding, and distribution advantages.
 Issues
in regionalization of global marketing
strategy:
 Cross-Subsidization
of Markets
 Identification of Weak Market Segments
 Use of “Lead Market” Concept
 Marketing Strategies for Emerging Markets
Copyright (c) 2009 John Wiley & Sons, Inc.
Chapter 8
6. Competitive Analysis
23

SWOT (Strengths, Weaknesses, Opportunities, and
Threats) Analysis (See Exhibit 8-6.)
A
SWOT analysis divides the information into two main
categories: internal and external factors.
 Based on SWOT analysis, marketing executives can
construct alternative strategies.
 The aim of any SWOT analysis should be to isolate the
key issues that will be important to the future of the firm
and that will be addressed by subsequent marketing
strategy.
Copyright (c) 2009 John Wiley & Sons, Inc.
Chapter 8
Exhibit 8-6: SWOT Analysis
24
Copyright (c) 2009 John Wiley & Sons, Inc.
Chapter 8