Globalization vs. Internationalization

Globalization vs. Internationalization

• Globalization pertains to the integration of national economies into a global one, achieved via free trade, capital mobility, and migration.
• Internationalization refers to the increasing significance of international trade, relations, treaties, and alliances.

Globalization in Business

• Globalization involves firms buying, developing, producing, and selling products and services in most countries and regions.
• Internationalization involves doing business in many countries, but often limited to a certain region.

Aspects of Globalization

• Regional and bilateral trade agreements have become popular.
• The World Trade Organization (WTO) helps its members improve living standards, create jobs, and improve lives through trade.
• The world is a level playing field for commerce where all players and competitors have an equal opportunity.
• Companies compete in markets for customers, resources, talent, and intellectual capital.
• Products move from multiple locations to multiple destinations.
• Companies in developing countries now provide human-based sub-supplies for multinational companies.
• Emerging and developing countries are becoming integral parts of global supply chains for large corporations.

Ghemawat's Perspective on "Distances"

• Increased distances negatively impact cross-border trade.
• "Distances" include geographic, cultural, administrative/political, and economic factors.
• Effective global strategies should acknowledge differences and distances between people, cultures, and locations.

The Five-Stage Decision Model in Global Marketing

• Part I: Deciding whether to internationalize (Chapters 1-4).
• Part II: Selecting which markets to enter (Chapters 5-8).
• Part III: Choosing market entry strategies (Chapters 9-13).
• Part IV: Designing the global marketing program (Chapters 14-17).
• Part V: Implementing and coordinating the global marketing program (Chapters 18-19).

Development of an International Marketing Plan

• Introduction: Plan’s purpose, which is based on assessment of opportunities combined with the firm's resources.
• Consists of marketing objectives and implementation strategies for a defined period.
• The 'nine strategic windows' model uses industry globalism and firm preparedness to decide if the firm should go abroad or rather stay at home.
• Benchmarking - uses customer-perceived value of competitor offerings to determine core competence and capabilities development.
• SWOT-analysis - Identify strengths and weaknesses, internal and external threats and opportunities.
• International Market Selection (IMS)- Find the right match between the internal and external analysis.
• Estimate total market (buyers × average yearly consumption)
• Segmentation - relevant screening criteria for B2C and B2B markets.

Market Entry Strategies

• Geographical Market: Region, country or area
• Customer Type: End-user, intermediaries, OEMs, global accounts
• Competitor Analysis: Discover your competitive advantage by finding out actions undertaken by competitors.
• Set reachable goals - Objectives should be Specific, Measurable, Achievable, Realistic and Timeable
• Entry mode strategy: Decide on best way to enter the market. The entry mode is important for distributors -Export modes (agent, distributor): Low control, low risk, more flexibility -Intermediate mode (joint venture, strategic alliance): shared control, risk, shared ownership -Hierarchical mode (Own subsidiary): High control, high risk, low flexible

The International Marketing Mix

• Product - The range of products you offer
• Price - Price of offering the products, service prices
• Promotion - Raising awareness
• Place - Channels to bring products, services, or even a relationship for customers

International Marketing Budget

• A budget by tactical marketing allocates equal resources strategic market plan.
• Estimate market and profit within a 3-year strategy.
• Global coordination involves cooperation and negotiation.
• Organization types for global marketing activities
  • Ad hoc exporting
  • Functional Structure
  • Intenrational Division Structure -Product/Geographical/Matrix Structure -Global Account Management
• Controlling - Measuring figures against a budget. If it is above tolerance, decide on another course
• Standardize performance, even with currency fluctuation.

Characteristics of LSEs and SMEs

• LSESs - Many resources, coordinate well
• Deliberate Strategy, in small increments
• More Formal/ Risk Averse
• Take advantage of scale
• use of advanced techniques
• SMES - Limited Resources, Externalization
• Emergent Strategy, Considerably Innovative
• Use less-expensive resources

The Nine Strategic Windows

• A matrix determining whether a business should globalize
• The X axis is industry globalism, the Y axis being prepardness for internationalization
• 9 segments are
  • Stay At Home
  • Consolidate Your Export Markets
  • Enter New Business
  • Seek Niches in International Markets
  • Consider Expansion in International
  • Prepare for Globalization -Prepare for a buyout -Seek Global Alliances -Strengthenyour Global Position

EPRG Framework

• Firms' operations are described with 4 orientations
  • Ethnocentric- Home country superior, centralized control.
    • Polycentric: Each country is unique
• Regiocentric: Organize the continents (e.g. Europe only)
• Geocentric: Offers globabl products with adaptiations

Global Marketing Defined

• Coordination that finds needs and beats competition

Skills for Global Marketing

• Develop marketing strategies
• Exploit Knowledge
• Adapt to world -diffusion
• Transfer knowledge

Glocalization

• Developing and selling localized products
• Think Globally, Act locally