global competitive marketing strategy

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Global Marketing Management, 4eGlobal Marketing Management, 4e
Chapter 8
Global Marketing
Strategies

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Chapter OverviewChapter Overview
1.1. Information Technology and GlobalInformation Technology and Global
CompetitionCompetition
2.2. Global StrategyGlobal Strategy
3.3. Global Marketing StrategyGlobal Marketing Strategy
4.4. Regionalization of Global MarketingRegionalization of Global Marketing
StrategyStrategy
5.5. Competitive AnalysisCompetitive Analysis

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IntroductionIntroduction
 On a political map, country borders are clear asOn a political map, country borders are clear as
ever. But on a competitive map, financial, trading,ever. But on a competitive map, financial, trading,
and industrial activities across national boundariesand industrial activities across national boundaries
have rendered those political borders increasinglyhave rendered those political borders increasingly
irrelevant.irrelevant.
 Not only firms that compete internationally but alsoNot only firms that compete internationally but also
those whose primary market is consideredthose whose primary market is considered
domestic will be affected by competition fromdomestic will be affected by competition from
around the world.around the world.

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1.1. Information Technology andInformation Technology and
Global CompetitionGlobal Competition
 Today, we are observing the emergence of aToday, we are observing the emergence of a
gross information productgross information product, and it dwarfs the gross, and it dwarfs the gross
domestic product.domestic product.
 Electronic Commerce (E-Commerce)Electronic Commerce (E-Commerce)
 Real-Time ManagementReal-Time Management
 Online CommunicationsOnline Communications
 E-CompanyE-Company
 Faster Product DiffusionFaster Product Diffusion
 Global CitizenshipGlobal Citizenship

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2. Global Strategy2. Global Strategy
 Global Industry:Global Industry:
– Those industries where a firm’s competitiveThose industries where a firm’s competitive
position in one country is affected by itsposition in one country is affected by its
position in other countries.position in other countries.
– The first question that faces managers isThe first question that faces managers is
the extent of globalization of their industry.the extent of globalization of their industry.
– Every industry has global or potentiallyEvery industry has global or potentially
global aspects.global aspects.

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2. Global Strategy2. Global Strategy
 Industry Globalization DriversIndustry Globalization Drivers (see Exhibit 8-1):(see Exhibit 8-1):
– Market DriversMarket Drivers
1. Common customer needs1. Common customer needs
2. Global customers and channels2. Global customers and channels
3. Transferable marketing3. Transferable marketing
4. Lead countries4. Lead countries

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2. Global Strategy2. Global Strategy

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2. Global Strategy2. Global Strategy
– Cost DriversCost Drivers
1. Global economies of scale and scope1. Global economies of scale and scope
2. Steep experience curve2. Steep experience curve
3. Global sourcing efficiencies3. Global sourcing efficiencies
4. Favorable logistics4. Favorable logistics
5. Difference in country costs5. Difference in country costs
6. High product development costs6. High product development costs
7. Fast-changing technology7. Fast-changing technology
8. Shorter product life cycles8. Shorter product life cycles

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2. Global Strategy2. Global Strategy
– Government DriversGovernment Drivers
1. Favorable trade policies1. Favorable trade policies
2. Compatible technical standards2. Compatible technical standards
3. World Trading Regulations3. World Trading Regulations
4. High growth/low labor cost developing countries4. High growth/low labor cost developing countries
5. Deregulation/privatization of industries5. Deregulation/privatization of industries
– Competitive DriversCompetitive Drivers
1.1.High exports and importsHigh exports and imports
2.2.Competitors from different continents andCompetitors from different continents and
countriescountries
3.3.Interdependent countriesInterdependent countries
4.4.Globalized competitorsGlobalized competitors

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2. Global Strategy2. Global Strategy
 Competitive StructureCompetitive Structure
– Cost leadershipCost leadership
– Product differentiationProduct differentiation
– Niche strategyNiche strategy
– Nature of Competitive Industry Structure (see Exhibit 8-2):Nature of Competitive Industry Structure (see Exhibit 8-2):
»Industry competitors»Industry competitors
»Potential entrants»Potential entrants
»Bargaining power of suppliers»Bargaining power of suppliers
»Bargaining power of buyers»Bargaining power of buyers
»Threats of substitute products or services»Threats of substitute products or services

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2. Global Strategy2. Global Strategy

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2. Global Strategy2. Global Strategy
 Gaining Competitive AdvantageGaining Competitive Advantage
– Creative destructionCreative destruction
– First-Mover Advantage vs. F-MFirst-Mover Advantage vs. F-M
DisadvantageDisadvantage
– Competitor-focused ApproachCompetitor-focused Approach
– Customer-focused ApproachCustomer-focused Approach

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2. Global Strategy2. Global Strategy
 Interdependency:Interdependency:
– Interdependency of modern companiesInterdependency of modern companies
– Example: Global computer industryExample: Global computer industry
– Governments also play a larger role,Governments also play a larger role,
affecting parts of the firm’s strategy.affecting parts of the firm’s strategy.

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3. Global Marketing Strategy3. Global Marketing Strategy
 Benefits of Global Marketing:Benefits of Global Marketing:
– Cost ReductionCost Reduction
– Improved Products and ProgramImproved Products and Program
EffectivenessEffectiveness
– Enhanced Customer PreferenceEnhanced Customer Preference
– Increased Competitive AdvantageIncreased Competitive Advantage
 Limits to Global Marketing:Limits to Global Marketing:
– Standardization vs. adaptation issuesStandardization vs. adaptation issues
– Globalization vs. localizationGlobalization vs. localization
– Global integration vs. local responsivenessGlobal integration vs. local responsiveness
– Scale vs. sensitivityScale vs. sensitivity

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3. Global Marketing Strategy3. Global Marketing Strategy

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3. Global Marketing Strategy3. Global Marketing Strategy

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4. Regionalization of Global4. Regionalization of Global
Marketing StrategyMarketing Strategy
 Regional strategies are the cross-subsidization ofRegional strategies are the cross-subsidization of
market share battles in pursuit of regionalmarket share battles in pursuit of regional
production, branding, and distribution advantages.production, branding, and distribution advantages.
– Issues in regionalization of global marketingIssues in regionalization of global marketing
strategystrategy::
 Cross-Subsidization of MarketsCross-Subsidization of Markets
 Identification of Weak Market SegmentsIdentification of Weak Market Segments
 Use of “Lead Market” ConceptUse of “Lead Market” Concept
 Marketing Strategies for Emerging MarketsMarketing Strategies for Emerging Markets

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5.5. Competitive AnalysisCompetitive Analysis
 SWOT (Strengths, Weaknesses, Opportunities,SWOT (Strengths, Weaknesses, Opportunities,
and Threats) Analysisand Threats) Analysis (see Exhibit 8-5)(see Exhibit 8-5)
– A SWOT analysis divides the information intoA SWOT analysis divides the information into
two main categories: internal and externaltwo main categories: internal and external
factors.factors.
– Based on SWOT analysis, marketing executivesBased on SWOT analysis, marketing executives
can construct alternative strategies.can construct alternative strategies.
– The aim of any SWOT analysis should be toThe aim of any SWOT analysis should be to
isolate the key issues that will be important toisolate the key issues that will be important to
the future of the firm and that will be addressedthe future of the firm and that will be addressed
by subsequent marketing strategy.by subsequent marketing strategy.

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5.5. Competitive AnalysisCompetitive Analysis