london met mk2004 chapter 1 textbook 0273706786 01 media light (1)

Svend Hollensen

GLOBAL MARKETING4th Edition

1 Global marketing in the firm

Hollensen, Global Marketing 4e, © Pearson Education 2008 1-2

Learning objectives

Characterize and compare the management style in SMEs and LSEs

Identify drivers for global integration and market responsiveness

Explain the role of global marketing in the firm from a holistic perspective


Learning objectives (2)

Describe and understand the concept of the value chain

Identify and discuss different ways of internationalizing the value chain


Structure ofGlobal Marketing 4e


Internationalization

Firms must decide whether to stay at home or strengthen the global position

Globalization reflects trend of buying, selling, and distributing products in many countries and regions of world


Figure 1.1 Nine strategic windows


EPRG framework of business activities

Ethnocentric

Polycentric

Regiocentric

Geocentric


What is this?

The firm’s commitment to coordinate its marketing activities across national boundaries in order to find and satisfy global customer needs better than the competition is known as ______.

Global marketing


What is this?

What term refers to the development and selling of products or services intended for the global market, but adapted to suit local culture and behaviour (think globally, act locally)?

Glocalization


Figure 1.2 Knowledge transfer

Core global business strategy (HQ)

CountryA

CountryB

CountryC

CountryD

Transferring global know-how and ‘best practices’ between countries with feedback to HQ

Internationalizing the strategy

Fee

dbac

k Feedback


Figure 1.3 Convergence of orientation


LSEs and SMEs

ResourcesFormation of strategy/

decision making processes

Organization

Risk takingFlexibilityEconomies of scale

and scopeUse of information

sources


Figure 1.4 Intended and emergent strategy

Realized strategy

Intended strategy

Deliberate strategy

Unrealized strategy

Emergent strategy

Source: Mintzberg, 1987, p. 14. Copyright © 1987 by the Regents of the University of California. Reprinted from the CaliforniaManagement Review, Vol. 30, No. 1. By permission of the Regents.


Figure 1.5 Incremental change and strategic drift


Figure 1.6 Entrepreneurial decision-making model


What is this?

When accumulated volume in production results in lower cost price per unit, _____ occur.

Economies of scale


Finding economies of scale

Reducing operating costs per unit and spreading fixed costs over larger volume due to ‘experience curve effects’

Pooling global purchasing gives the opportunity to concentrate global purchasing power over suppliers

Building of centres of excellence by using larger scale and focusing talent in one location


What is this?

When resources can be reused from one business/country in additional business/countries, _____ occur.

Economies of scope


Production orientation vs marketing orientation


Global coordination

Global integration

Market responsiveness


Figure 1.7 Global integration/ market responsiveness grid


Forces for global coordination/ integration

Removal of trade barriers

Global customersRelationship

managementStandardized

worldwide technology

Worldwide markets Global villageWorldwide

communicationGlobal cost drivers


Forces for market responsiveness

Cultural differencesRegionalism/ protectionismDeglobalization trend


Figure 1.8 7-S framework

Structure Strategy

SystemsShared Values

Style

Skills Staff

Source: ‘McKinsey 7S Framework’ from In Search of Excellence: Lessons from America’s Best Run Companies by Thomas J. Petersand Robert H. Waterman, Jr. Copyright © 1982 by Thomas J. Peters and Robert H. Waterman, Jr. Reprinted by permission ofHarperCollins Publishers, Inc.


Figure 1.9 The value chain

Inboundlogistics

OperationsOutboundlogistics

Marketingand sales

Service

Primary activities

Upstream value activities Downstream value activities

Procurement

Technology development

Human resource management

Firm infrastructure

Sup

port

act

iviti

es

Source: Reprinted with permission of The Free Press, a division of Simon & Schuster Adult Publishing Group, from Competitive Advantage: Creating and Sustaining Superior Performance by Michael E. Porter. Copyright © 1985, 1998 Michael E. Porter.


Figure 1.10 A simplified value chain

Research and development

Production Marketing Sales

and service

Upstream Downstream


Figure 1.11 Strategic pyramid

Research and development

Production Marketing Sales

and service

1. Strategic

2. Managerial

3. Operational


Figure 1.14 Value shop and the service chain


What is this?

What term refers to an extension of the conventional value chain, where the information processing itself can create value for customers?

Virtual value chain


Figure 1.15 Virtual value chain

Define information

problem

Organize, select, gather

information

Synthesize information

Distribute information

R&D Production Marketing Sales

and serviceValue

Value

Physical value chain

Virtual value chain


Creating value by using information

Managing risks

Reducing costs

Offering products and services

Inventing new products


For discussion (1)

What is the reason for ‘convergence orientation’ in LSEs and SMEs?

How can an SME compensate for its lack of resources and expertise in global marketing when trying to enter export markets?


For discussion (2)

What are the main differences between global marketing and marketing in the domestic context?

Explain the main advantages of centralizing upstream and decentralizing downstream activities?

How is the ‘virtual value chain’ different from the ‘conventional value chain’?


Nivea: A case study

Which degree of ‘market responsiveness’ and ‘global coordination/integration’ does Nivea represent?

Will Nivea be able to cross borders without any adaptation? If not, which elements should be adapted?

Which marketing problems does Nivea anticipate, when penetrating the US market?

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london met mk2004 chapter 1 textbook 0273706786 01 media light (1)

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