INTERNATIONAL MARKETING MANAGEMENT

SESSION 13:

GLOBAL PORTFOLIO STRATEGY

1

2

CHANGING MARKET ORIENTATION

PHASE #1 PHASE #2 PHASE #3

domestic countries

firm firm

sub

firm

sub

Country-focused international expansion (e.g. acquisition, local expansion)

Trend to industry consolidation and growth of global competition

Forces towards global market integration

Need to:

re-center direction for growth

Improve coordination across national boundaries

adopt global perspective3

TRIGGERS TO GLOBAL RATIONALIZATION

4

PHASE 3: GLOBAL RATIONALIZATION

world markets

5

PHASE 3: KEY STRATEGIC DECISIONS

Establish Global Portfolio of Countries, Products, Market Segments

Develop Global Marketing Strategy – Broad-Based, Focused, Hybrid

Improve Efficiency of Productionand Logistics

Scale Efficiencies (Tangible and Intangible)

Learning

Transfer of Ideas, Products, Programs, Experience and Know-how (Best Practices)

LEVERAGING: SYNERGIES

6

LEADING

TYPICAL FIRMS IN INTEGRATION PHASE

FIRMTYPE

COMPETITIVETHRUST

STRATEGICIMPERATIVES

Firms targetingglobal segments(Body Shop, Gucci)

Large firms withbroad-based globalstrategies(Ford, IBM, P&G)

Globally focused

Globally integrated

Maintain focus andgrowth

Global restructuring

Strategic flexibility

7

8

Products/Product LinesExisting New

Seg

men

ts/C

ust

om

ers

N

ew

E

xist

ing

Countries

/Reg

ions

Existin

g

New

Stage in Value Chain

Existing

New

GLOBAL MARKET GROWTH DIRECTIONS

9

RE-ENGINEERING THE GLOBAL PORTFOLIO

10

11

12

Mar

ket

Att

ract

iven

ess

low

h

igh

low highCompetitive Strength

Asia

Latin America

Africa

U.S.

Europe

SBU PORTFOLIOS: REGION

13

COMPETITOR ACOMPETITOR A

Mar

ket

Att

ract

iven

ess

Low

Hig

h

Low HighCompetitive Strength

Japan

Argentina

Brazil

China

Germany

France

U.K.

U.S.

COMPETITOR BCOMPETITOR B

Mar

ket

Att

ract

iven

ess

Low

Hig

h

Low HighCompetitive Strength

Japan

S. Korea

Brazil

China

Germany

France

U.K.

U.S.

Hungary

Key Countries Key Countries

FOOD AND BEVERAGE PORTFOLIOS

14

Macro-Economic

Import/Exports Between Countries

Air Traffic

Mail Flows

Communication (media links)

Tourist Flows

Geographic Proximity

Product-Market

Flows of Goods

Common Distributors Retailer Organization

Network of Service Organizations

Gray Markets and Parallel Importation

Presence of Same Competition

Presence of Same Customers

Firm Specific

Family Branding/Corporate Name

Common Production Facilities

Common Suppliers

Shared R&D Expenditure

Shared Warehousing Facilities

Shared Marketing Expenditure

Common Sales force

Shared Distribution Facilities

GEOGRAPHIC MARKET LINKAGES

15

FOOD AND BEVERAGE EXPANSION OPTIONS FOR A COMPANY

16

Growth vs. Mature Markets

Risk Diversification

Geographic Concentration (Market Interconnectedness)

BALANCING THE PORTFOLIO

17

DragonDragon

Low High

GrowthMarkets

MatureMarkets

Market Interconnectedness

TigerTiger

GoatGoatOxOx

BALANCING THE GLOBAL PORTFOLIO

18

Need to chart direction for long-run growth

Importance of balancing growth vs. mature markets

Growing integration of markets impacts expansion choice

IMPLICATIONS