Eprg approach 1
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Transcript of Eprg approach 1
EPRG Approach
Aakash Kumar 001Gaurav Kataria 003Rahul Ujjainwal 005Rahul Anand 006
MANAGEMENT ORIENTATIONS
The form and substance of a company's response toglobal markets opportunities depend greatly onmanagement’s assumption and beliefs (bothconscious and unconscious) about the nature of theworld. The worldview of a company’s personnel canbe described as :
ETHNOCENTRIC
POLYCENTRIC
REGIOCENTRIC
GEOCENTRIC
Management orientation – Home country orientation
Perception about market –Domestic market is superior Focuses on similarities between home and foreign market Considers foreign market secondary to an extension of domestic market
Marketing strategy – Extension of domestic strategy to foreign market
Ethnocentric
Companies basic objective – Profitability
Type of governance – Top-down
Culture - Home country
Technology - Mass production
HRM practices – Overseas operations are managed by people from home country
Managerial predisposition - Manager/MNC rely n values &interests of parent company in formulating and implementing strategic plan
Characteristics –Overseas operations viewed as secondary & primary means of disposing the surplus production Domestic techniques &personnel superior to foreign & most effective in overseas marketDomestic marketing mix is employed without major modifications in overseas market All foreign marketing operations are planned & carried out from home base & overseas marketing administered by export department
Ethnocentric …cont.
Merits –No cost & efforts needed for adaptation/localization It easy route to internationalization when foreign market exists with similar domestic characteristics
Demerits – No full exploitation of IB opportunities worldwide Main focus on domestic market
Examples Nissan in 1st years exported cars in US markets, sold cars without change then sold car in Japan
Management orientation – Host country orientation
Perception about market –Each national market is distinctive Focuses on differences between home country & foreign country
Marketing strategy – Localization / adaptation
Companies basic objective – Public acceptance
Polycentric
Type of governance – Each local unit sets objectives (bottom up)
Culture-Host country
Technology - Batch production
HRM practices – Local nationals are used in key management positions
Managerial predisposition - MNC tailor strategic plan to meet the need of local culture
Characteristics –Recognize importance of inherent differences in overseas markets Subsidiaries are established in overseas market & each is independent with own marketing objectives & plans Local techniques & personnel best suited to deal with local market conditions International marketing organized on country to country basis with separate marketing strategy for all
Polycentric…… cont.
Merits –Adaptation to market characteristics help in better understanding of local needs which will lead to better exploitation of market potentials
Demerits –High cost of national responsive marketing mix for each country Delay in localization
Examples McD (no beef burgers in India)
Management orientation – Regional orientation
Perception about market – Markets can be differentiated on the basis of common regional characteristics
Marketing strategy – Trade- off between standardization & localization
Companies basic objective – Both profitability & public acceptance
Regiocentric
Type of governance – Mutually negotiated between region & its subsidiaries
Culture-Regional
Technology - Flexible manufacturing
HRM practices – Regional people are developed for key managerial positions anywhere in region
Managerial predisposition - MNC use a strategy that addresses both local & regional needs
Characteristics –Treat different regions as different market Regions with similarity of marketing characteristics treated as separate market
Merits - Advantages of both localization &standardization
Demerits – Lack of attention to inter regional differences
Examples Punjab (paneer products more)Gujarat (sugar more)
Management orientation – Global orientation
Perception about market – Entire world is a single market that can be effectively tapped by standardized marketing strategy
Marketing strategy – Global standardization
Companies basic objective – Both profitability & public acceptance
Type of governance – Mutually negotiated at all level of organization
Geocentric
Culture- Global
Technology - Flexible manufacturing
HRM practices – Best people anywhere in the world are developed for key managerial positions everywhere in the world
Managerial predisposition - MNC constructs its strategic plan with a global view of operations
Characteristics –Entire world is treated as single market Standardized marketing mix, to give uniform image of product &company for global market Worldwide approach to marketing & its operations
Merits –Economies of large scale production Lower costs advantage of pace
Demerits –Not successful in many cases Uniform /standard marketing mix not guarantees for sure success in every situation
Examples Microsoft & Nokia standardized products world wide