Global Sales: International Business PDF

WEEK 10: Global Sales: International Business and promotion – and take an evidenced-based Scenarios, Methodologies, and Business Types approach to decision making. Real-world examples of gl...

WEEK 10: Global Sales: International Business and promotion – and take an evidenced-based Scenarios, Methodologies, and Business Types approach to decision making. Real-world examples of global marketing: Global Sales 1. Nike An Overview of Global Marketing 2. Coca-Cola International Business Scenarios Global marketing is the focus on marketing an We live in a globalized world where trade and commerce organisation’s products or services in the international occur beyond borders. Businesses have expanded their marketplace – and in an increasingly global society, with operations beyond national borders, leading to the people more connected than ever before, it’s an emergence of these three. increasingly important area of marketing management. Domestic Business Global marketing focuses on a single marketing strategy for a worldwide market — effectively treating the world as  operates within the boundaries of a single country, a single market — international marketing adapts its serving the needs of the local market. marketing strategy and tactics for different countries.  primarily caters to local customers within the Benefits of Global Marketing country of operation.  operates within the legal and regulatory 1. Wider audience and expanded customer base frameworks of a single country. 2. Enhanced brand awareness and reputation Example: 3. Additional insight - more opportunities to gather 1. A grocery store that sells food and household insight and feedback. items to customers in its local community. 2. A law firm that offer legal services to clients in its  global marketing strategy is like any state. other marketing strategy. It should outline the four 3. A manufacturing company that produces goods Ps of any marketing mix – product, price, place, for sale in its country. Page 1  Multinational Enterprise International Business  A multinational enterprise, (MNE) is  expands operations across national borders, an enterprise producing goods or delivering targeting multiple countries and diverse markets. services in more than one country.  serves customers from various countries and  A multinational enterprise has its management cultures. headquarters in one (or rarely more than one) country, the home country, while also operating in  must comply with domestic and international laws, other countries, the host countries. treaties, trade agreements, and regulations. Example: Examples of multinational corporations include Apple, 1. Foreign Direct Investment (FDI): Companies Amazon, Microsoft, McDonald's, and Volkswagen. These establishing subsidiaries, branches, or production facilities in foreign countries to access new companies are headquartered in one nation but operate markets, resources, or cost advantages. divisions in many other countries in order to expand their business and reach more customers. 2. International Franchising: Granting the rights to use a brand and business model to a foreign International Business Methodologies partner in exchange for fees and royalties. Before diving into a partnership, understanding the 3. Licensing Intellectual Property: Allowing foreign various international staffing approaches can help you entities to use patents, trademarks, copyrights, or align your strategies with your business goals. technology in exchange for licensing fees. 4. International Joint Ventures: Collaborative Ethnocentric Perspective partnerships between companies from different The ethnocentric approach centers on the premise that countries to pursue shared business opportunities the best practices and strategies are those that originate and share risks. from the company’s home country. This means PCNS’s often fill key managerial positions. Page 2 Parent Country National’ or ‘PCN’ are those employees Integration Issues who are sent abroad for work. Limited Career Path Benefits: Regiocentric Perspective Consistency in Management Practices Control and Coordination The regiocentric approach is a middle ground, where the Challenges: focus is on hiring and managing talent within a particular geographic region, rather than a single country. Cultural Insensitivity Benefits: Limited Local Responsiveness Regional Expertise Polycentric Perspective Balanced Coordination Challenges: The polycentric approach advocates hiring HCNs to manage subsidiaries in their own country. This strategy Complex Management Structures leans on local expertise to navigate the market. Regional Bias A host-country national (HCN) is an employee who is a citizen of a country in which an organization's branch or Geocentric Perspective plant is located, but the organization is headquartered in The geocentric approach takes a global perspective, another country. focusing on hiring the best talent regardless of Benefits: nationality. This approach is aligned with the vision of creating a truly global organization. Local Expertise Cost-Effective Benefits: Challenges: Global Talent Pool Unified Corporate Culture Page 3 Challenges: foreign market, and lower returns due to lower risk. Franchises Complex Logistics Franchising enables organizations a low cost and High Costs localized strategy to expanding to international markets, while offering local entrepreneurs the opportunity to run Choosing the Right Approach an established business. Here are a few factors to consider:  Advantages of franchising (for the franchiser) include low costs of entry, a localized workforce 1. Company Size and Resources (culturally and linguistically), and a high speed 2. Nature of Business Operations method of market entry. 3. Cultural Considerations  Disadvantages of franchising (for the franchiser) 4. Long-term Goals include loss of some organizational and brand control, as well as relatively lower returns than other strategic entry models. International Business Types Exporting Obtaining licenses Exporting is the practice of shipping goods from the When considering strategic entry into an international domestic country to a foreign country. Export of services market, licensing is a low-risk and relatively fast foreign consist of all services rendered by residents to non- market entry tactic. residents.  Advantages of licensing include localization Contract Production through a foreign partner, adherence to strict Contract manufacturing is a business model in which a international business regulations, lower costs, company engages a manufacturer to produce its and the ability to move quickly. products or components.  Disadvantages to this entry mode include loss of control, potential quality assurance issues in the Contract manufacturing is a strategy that conserves a Page 4 company’s resources and boosts profitability while International Businesses capitalizing on the expertise and efficiency of refers to economic activities across the boundaries of experienced manufacturers. This practice is also known nation–states, of which trade and foreign investment are as outsourcing or contract production. the most important. Collaborative Enterprise A cooperative partnership between two individuals or businesses in which profits and risks are shared. It involve two parties contributing their own equity and resources to develop a new project. The enterprise, revenues, expenses and assets are shared by the involved parties. Outsourcing Outsourcing is the practice of hiring a party outside a company to perform services or create goods. In some cases, these were traditionally performed in-house by the company's own employees and staff. A practice usually undertaken by companies as a cost-cutting measure or a strategic management tool. Contracting out Is a means of delivering public/private services and/or performing public/private functions where the company provides compensation to an outside party in exchange for a defined set of services or functions. Also known as outsourcing. Page 5