Business Marketing Business Marketing Strategies Strategies
for Global Marketsfor Global Markets
Chapter 8Chapter 8
Capturing Global AdvantageCapturing Global Advantage
What are RDEs?What are RDEs?
Why are they important?Why are they important?
Sources of Global AdvantageSources of Global Advantage
Three major types of advantagesThree major types of advantages• Cost advantagesCost advantages• Market access advantagesMarket access advantages• Capabilities advantagesCapabilities advantages
Cost AdvantagesCost Advantages
20-40% savings in landed costs20-40% savings in landed costs• What are landed costs?What are landed costs?
Lower Operating CostsLower Operating Costs• Wage differencesWage differences• Business process outsourcingBusiness process outsourcing
Lower Capital CostsLower Capital Costs• Capital and equipments costsCapital and equipments costs• 30% savings30% savings• Hidden costsHidden costs
Market Access AdvantagesMarket Access Advantages
Access to Growing MarketsAccess to Growing Markets• ChinaChina
Following customersFollowing customers
Capabilities AdvantageCapabilities Advantage
Gain knowledge and skillsGain knowledge and skills• China and IndiaChina and India
How does this help?How does this help?• Improve R&DImprove R&D• Address unmet consumer needsAddress unmet consumer needs• Tailor products to local marketTailor products to local market
To Outsource or not to Outsource?To Outsource or not to Outsource?
THAT is the questionTHAT is the question
To outsource:To outsource:
To not outsource:To not outsource:
International Market Entry OptionsInternational Market Entry Options
ExportingExporting ContractingContracting Strategic AlliancesStrategic Alliances Joint VentureJoint Venture
Market Entry OptionsMarket Entry Options
ExportingExporting• Goods are produced ___________Goods are produced ___________• Sales are made through Sales are made through
____________________________________• Lowest commitment and riskLowest commitment and risk• DisadvantagesDisadvantages
Market Entry OptionsMarket Entry Options
ContractingContracting• Two typesTwo types
LicensingLicensing• What can be licensed?What can be licensed?• AdvantagesAdvantages• DisadvantagesDisadvantages
Management contractsManagement contracts• Turnkey operationsTurnkey operations
Market Entry OptionsMarket Entry Options
Strategic AlliancesStrategic Alliances• ““Collaborations among partners Collaborations among partners
involving the commitment of capital and involving the commitment of capital and management resources with the management resources with the objective of enhancing the partner’s objective of enhancing the partner’s competitive positions.”competitive positions.”
• AdvantagesAdvantages• DisadvantagesDisadvantages
Market Entry OptionsMarket Entry Options
Joint VenturesJoint Ventures• Why?Why?• AdvantagesAdvantages• DisadvantagesDisadvantages
Choosing a Mode of EntryChoosing a Mode of Entry• FactorsFactors
Multidomestic v. GlobalMultidomestic v. Global
MultimdomesticMultimdomestic
GlobalGlobal
International Strategy and the International Strategy and the Value ChainValue Chain
Primary activitiesPrimary activities• UpstreamUpstream• DownstreamDownstream
Competitive AdvantageCompetitive Advantage• DownstreamDownstream• UpstreamUpstream
CoordinationCoordination ConfigurationConfiguration
General FrameworkGeneral Framework
1.1. Build a Unique Competitive PositionBuild a Unique Competitive Position2.2. Emphasize a Consistent Positioning Emphasize a Consistent Positioning
Strategy Strategy3.3. Establish a Clear Home Base for Establish a Clear Home Base for
BusinessBusiness What’s a home base?What’s a home base?
• HPHP
4.4. Leverage Product Line Home Bases Leverage Product Line Home Bases at Different Locationsat Different Locations
General FrameworkGeneral Framework
5.5. Disperse Activities to Extend Home Base Disperse Activities to Extend Home Base AdvantagesAdvantages
Purchase from cost-effective vendorsPurchase from cost-effective vendors Improve market accessImprove market access Tap competitive advantages in other placesTap competitive advantages in other places
6.6. Coordinate and Integrate Dispersed Coordinate and Integrate Dispersed ActivitiesActivities
Establish clear global strategyEstablish clear global strategy Develop info and accounting systemsDevelop info and accounting systems Encourage personal relationshipsEncourage personal relationships Rely on incentive systemsRely on incentive systems
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