Olympic Sponsors & Globalization

Olympic Games Sponsors in France

• Orange was an inclusive sponsor, praised for its technological solutions and commitment to fighting prejudices about disabilities.
• Orange's slogan was "When you love sports, you love sports."
• LVMH aimed to be "everywhere" during the Games
• Aya Nakamura and Céline Dion wore Dior during the opening ceremony, and French athletes wore Berluti
• Medal ceremonies featured presenters in LVMH outfits, and medals were displayed in Vuitton trunks
• The partnership between the Olympics and LVMH was criticized as overly commercial, creating a disconnect between a popular event and the luxury it represents.
• EDF provided an electric flame without fuel and promoted the value for innovation.
• Samsung was successful in communication, visibility, and engagement
• Samsung gifted the Galaxy Z Flip 6 to all athletes and took center stage on podiums with "Victory Selfies".

Globalization

• Globalization is significant today in both leisure and business, as seen in events like the Olympic Games.
• Major shifts are occurring in globalization, with the last comparable shift happening around the fall of the Berlin Wall in 1989.
• Globalization involves the intensification of worldwide social relations linking distant localities
• Local events are shaped by occurrences far away, and vice versa
• Local transformation is a key aspect of globalization, alongside the lateral extension of social connections across time and space.
• The concrete implication of globalization is an increasing interdependence between national systems through trade, military alliances, domination, and cultural expansion.
• The symbolic implication of globalization is the increasing reflexivity and relativization of the local with regards to the global.

Cumulative Outcomes of Globalization Stages

• From the 16th to 19th centuries, trade and colonization led to an emerging global trade infrastructure and a division of power and labor in the global trade system.
• During the 19th and 20th centuries, internationalization served as a platform for mass production (rationalization) and mass consumption (culture).
• In the 21st century, globality provides a platform for real-time connections for economic and cultural exchange.

Paradoxes of Globalization

• Globalization results in a continuous unequal distribution of wealth and labor.
• Globalization establishes conditions for the coexistence of both homogeneous and diverse tastes and lifestyles in the same locality.
• Globalization fosters the creation of a global mindset and the appreciation of local traditions in the same area.

Market Environment: PESTEL Factors

• Political factors include government stability, political climate, popular support, regulations, and geopolitical concerns
• The WTO shows that countries with the most trade agreements are the 46 member countries of the European Union.
• Fifteen countries signed the world’s biggest free trade deal, representing 2.2 billion people, $26.2 trillion GDP, 28% of global trade, and 30% of global economic output.
• The world’s largest trading blocs are RCEP (30.5%), USMCA (28%), EU (17.9%), AfCFTA (2.9%), and Mercosur (2.4%).
• Economic factors include economic growth, inflation and interest rates, unemployment rates, and household income.
• Social factors include population size, race, age, culture, and religion.
• Technology includes disruptive innovation and productivity.
• Environmental factors focus on green initiatives and sustainability.
• Environmental issues include North America, Latin America and the Caribbean, South Asia, and Europe.
• War problems include the Middle East and North Africa.
• Legal factors include current laws, pending laws, lobbying, and pending court cases.

Legal Systems

• In Common Law Countries, judicial decisions of appellate courts create binding legal authority for lower courts addressing similar questions of law
  • Common Law is an adversarial legal system that is used in the US, UK, and Australia
• In Civil Law Countries, all legal rules are in codes, and judicial decisions of appellate courts do not create binding legal authority.
  • Civil Law is used in Europe, Russia, South America, and Mexico
• Religious Law uses religious documents as legal sources, these are used alongside secular laws
• Customary Law, used by monarchies or tribes, grants specific legal powers to leaders
• Hybrid Law is a combination of 2 or more legal systems within a nation

Conflict Resolution in International Marketing

• There is no international commercial law
• Marketers must adhere to the laws of the host country
• Contracts should have a jurisdictional clause or include conciliation/arbitration.
  • Conciliation: An agreement to resolve disputes by asking third parties to mediate differences
  • Arbitration: A selected informed party acts as a referee in a dispute

Motivations for Companies to Internationalize

• Proactive motives include market opportunities, unique products, economies of scale (volume), and economies of scope (variety).
• Reactive motives include domestic market saturation, increased competition, overproduction, and overcoming seasonality.

Variables for International Business

• Potential revenues vs potential costs should be considered
• The classic approach focuses on potential revenues (GDP, market size and growth, propensity to consume).
• The distance approach focuses on costs and risks of doing business in a new market (CAGE: Cultural, Administrative, Geographic, Economic).

Summary

• Globalization is inevitable under capitalism.
• The international market environment has uncontrollable factors.
• The globalized marketplace develops through dependencies from past, economic, and political trends.
• Marketers need to analyze variables to make informed decisions about competition strategies.