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Global strategy


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Global strategy

  1. 1. Global Marketing<br />
  2. 2. Coca Cola<br />16000 beverages consumed every……<br />Soda fountain drink in 1886<br />Bottling in 1894<br />Canada and Mexico in 1897<br />Bottling plant in Panama in 1906<br />Marketed in 76 countries by 1929<br />Build 63 international bottling plants during WW-II<br />100 countries in 1957<br />
  3. 3. Four international franchises account for 40% of world wide sales<br />Coca Cola HBC in Greece, has operating rights in 28 countries<br />Coca Cola has ownership stakes in them<br />JV with Inca Kola in Peru<br />Georgia from Coca Cola Japan<br />Orange drink from China now in Thailand and India<br />JV with Nestle for tea products<br />
  4. 4. Vizio<br />Founded by William Wang<br />Among the top three sellers of flat TVs in US<br />Employee count of around 100 and sales of $2 billion<br />Very close relationship with suppliers from Taiwan, China Korea and Japan<br />Assembly operations in Mexico too<br />Storage and transportation by 3rd party logistics providers<br />
  5. 5. Boeing<br />30% of the Boeing 777 is made by foreign companies<br />Includes 8 from Japan and 3 from Italy<br />65% of the Boeing 787 will be outsourced to foreign companies<br />35% will go to 3 Japanese firms<br />
  6. 6. Level of Internationalization<br />Telephone calls – 2%<br />Immigrants – 2%<br />University students – 5%<br />Management research – 6%<br />Private charity – 7%<br />Tourist arrivals – 9%<br />Patents – 14%<br />Stock investments – 15%<br />Trade (to GDP) – 27%<br />
  7. 7. Google in Russia<br />Reach is 28%<br />Yandex - 64%<br />Rambler – 54%<br />Linguistic differences<br />Adaptation to local payment mechanism <br />Grew only after it set up a physical presence in 2003<br />
  8. 8. Google in China<br />Pullout imminent<br />Censorship and hacker attacks<br />Launched self-censored in 2006<br />Youtube, Blogger, Picasa already blocked<br />Twitter and Facebook<br />
  9. 9. Coca Cola 80 to 96<br />Growth fever<br />Economies of scale<br />Statelessness<br />Ubiquity<br />Centralization and standardization<br />From $4 bil to $140 bil in 16 years<br />
  10. 10. Coca Cola 96 --<br />Economic nosedive in Brazil and Japan <br />Asian currency crisis<br />Russia and East Europe<br />Think Local, Act Local<br />6000 layoffs<br />
  11. 11. CAGE<br />Cultural<br />Administrative<br />Geographical<br />Economic<br />
  12. 12. Hofstede<br />Individualism and collectivism<br />Power distance<br />Uncertainty avoidance<br />Masculinity and femininity<br />Time orientation<br />
  13. 13. Trompenaar<br />Universalism and particularism<br />Individualism and collectivism<br />Neutral and affective relationships<br />Specific and diffuse relationships<br />Achievement and ascription<br />Relationship to time<br />Relationship to nature<br />
  14. 14. Schwartz<br />Conservatism and autonomy<br />Hierarchy and egalitarianism<br />Mastery and harmony<br />
  15. 15. Administrative/Political risk<br />Transfer risk<br />Operational risk<br />Ownership risk<br />Macro risk and micro risk<br />
  16. 16. Legal Differences<br />International Law<br />Common law<br />Civil law<br />Theocratic law<br />Communist law<br />
  17. 17. Cost Pressures and Pressures for Local Responsiveness<br /> Firms that compete in the global marketplace typically face two types of competitive pressures<br />pressures for cost reductions<br />pressures to be locally responsive<br />These pressures place conflicting demands on the firm <br />
  18. 18. Pressures for Local Responsiveness<br /> Pressures for local responsiveness arise from<br />differences in consumer tastes and preferences<br />differences in traditional practices and infrastructure<br />differences in distribution channels<br />host government demands<br />Firms facing these pressures need to differentiate their products and marketing strategy in each country<br />
  19. 19. Choosing a Strategy<br /> There are four basic strategies to compete in the international environment<br /> global standardization<br /> localization<br /> transnational<br /> international<br />
  20. 20. Making Alliances Work<br />Many international strategic alliances run into problems<br />The success of an alliance seems to be a function of three main factors<br /> partner selection<br /> alliance structure <br /> the manner in which the alliance is managed<br />
  21. 21. Basic Entry Decisions<br />A firm expanding internationally must decide<br />which markets to enter<br />when to enter them<br />on what scale<br />how to enter them (the choice of entry mode)<br />
  22. 22. Dabur<br />Large population<br />Long term GDP growth<br />Should not be margin-dilutive<br />Between China and Nigeria. If not:<br />Is it a developed market<br />Is there a high cost of operation<br />Acquisition of brands can be considered<br />Technology to be compatible<br />Keep “herbal” platform<br />
  23. 23. Foreign Entry<br />Firms can enter foreign markets through<br />Exporting<br />Countertrade<br />Turnkey projects<br />Contract manufacturing<br />Licensing or franchising<br />Ajoint venture with a host country firm<br />Awholly owned subsidiary<br />
  24. 24. Dunning’s O-L-I Framework<br />Ownership advantages<br />Location advantages<br />Internalization<br />
  25. 25. ADDING Scorecard<br />Adding volume<br />Decreasing costs<br />Differentiating<br />Increasing industry attractiveness<br />Normalizing risk<br />Generating knowledge<br />
  26. 26. Ghemawat’s As<br />Adaptation<br />Aggregation<br />Arbitrage<br />