B2B 10

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Copyright 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved.Developed by Cool Pictures and MultiMedia Presentations


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Several forces are

driving companies

around the world to

globalize by expanding

their participation in

foreign markets.

External Drivers of Globalization

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The firm must find, or create, a willingness among

customers to pay for environmental quality.

The business must establish credible information

about the environmental benefits of its products.

The innovation must be difficult for competitors to

imitate.

Three Requirements ofEnvironmental Product Differentiation

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A first step in developing effective international marketing

strategy centers on understanding the alternative ways

that a firm can participate in international markets.

The mode of entry selected should consider the level of afirms experience overseas and the stage in the evolution

of its international involvement.

Spectrum of Involvement in International Marketing

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Contractual Entry Modes

1.Licensing.

2.Franchising.

3.Management Contracts.

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Strategic Alliances Stumbling Blocks

Partners are organized quite differently for making

marketing and product design decisions.

Partners that combine the best set of skills in one

country may be poorly equipped to support each

other in other countries.

The quick pace of technological change often

guarantees that the most attractive partner todaymay not be the most attractive partner tomorrow.

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The Value Chain: Upstream and Downstream Activities

A firm that competes

in the internationalmarket must decide

how to spread the

activities among

countries.

Central to thisdecision is the need

to distinguish

upstream from

downstream

activities.

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The purest global strategy concentrates as many activities as possible in

one country, serves the world market from this home base, and closely

coordinates those activities that must be performed near the buyer.

Types ofInternationalStrategy

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Framework For Global StrategyBuild on the Foundation of a Unique Competitive

Position.

Emphasize a Consistent Positioning Strategy

across International Markets.

Establish a Clear Home Base for Each Distinct

Business.

Leverage Product-Line Home Bases at Different

Locations.

Disperse Activities to Extend Home Base

Advantages.

Coordinate and Integrate Dispersed Activities.

Global

Strategy

Source: Adapted from Michael E.

Porter, Competing Across

Locations: Enhancing Competitive

Advantage through a Global

Strategy, in Michael E. Porter

(ed.), On Competition(Boston:

Harvard Business School Press,

1998), pp. 309-350.

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Extending the Firms Competitive Position

1.Capturing competitive advantages in

purchasing.

2.Securing or improving market access.

3.Selectively tapping competitive advantages

at other locations.

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Global Competitors Achieve Unified Action By:

1.Establishing a clear global strategy.

2.Developing information and accounting

systems that are consistent on a worldwide

basis.3.Encouraging personal relationships and the

transfer of learning among subsidiary

managers.

B2B 10

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