global market Flashcards
Why go global
rising globalization, tech trends, maked the world more open to companies
reacting to global competiton and costs
-lower costs due to economies of scale
-firms can compete better in home markets if they reduce costs in host market
What environment makes international market desirable -rank them by indicators of market potential
STP: focus on regions where best audiences are found
3Cs: research competitors in each locale
distribution channels: develop region-based strategies and partnerships
branding/promotion : localize your branding and campaigns
overall: be aware of cultural/language differences
Which market to enter- political/regulatory forces
political stability
gov regulations
trade sanctions, boycotts
trade agreements
tariffs
Economic forces
economic development& infrastructure
consumer income& purchasing power
income distribution
projected growth
exchange rate
technological forces
existing tech infrastructure
transportation
distribution channels
communications
commerce
production
demographic forces
size pop
rate pop growth
degree of urbanization
population density
language
age structure/composition of pop
How to enter the marker
standarize vs customize
standarize way to enter market
treat entire world as single entity
consistent strategy across countries
pros of standarize market entry
economies of scale
lower R&D expense
lower advertising expense
What is customize entry
adjusting marketing strategy according to the market
what are the pros of customize entry
closer to local customers wants/needs but more complex-resource intensive)
4Ps
What are the international entry strategies
Less risk, less profit
Exporting
licensing
joint venture
foreign direct investment
most risks, higher profit
What is exporting
producing goods in one country and sell in another country.
direct exporting: through own distribution
indirect exporting: through intermediaries
Advantages of exporting
low risk, make least number of changes in marketing strategy.
Disadvantage of exporting
less local employment in host country
whats licensing
offering the right to use a trademark, patent in return for a fee Ifranchising, contract manufacturing)
advantages of licensing
low risk and capital free
licensee gains exclusivity and competitive advantage
creates local employment
disadvantages of licensing
licensee may gain bargaining power over time
licensor looses control and obtains less profit
WHats joint venture
agreement between 2 or more firms to invest together to create local business, sharing ownership, control and profit of the new company
advnatages of joint venture
greater control
leverage partners resources
disadvantages of joint venture
disagreements on strategic decisions
endure higher risk
require financial, physical, managerial resources to enter
whats foreign direct investment
firm invest in and owns foreign subsidiary, establishing business operation or acquiring business asset in foreign country
advantage of FDI
most control,
cost saving,
better understanding of local market conditions
less affected fluctuations in exchange rates
