Part I Flashcards
What are the 5 stages of the decision model in global marketing?
- The decision whether to internationalize
- Deciding which markets to enter
- Market entry strategies
- Designing the global marketing programme
- Implementing and coordinating the global marketing programme
What does LSE stand for?
Large scale enterprise
What is an LSE?
Firms with more than 250 employees.
What does SME stand for?
Small to medium sized enterprise
What is an SME?
Small is less than 50 employees.
Medium is between 50 and 250 employees
LSE or SME?
many resources
LSE
LSE or SME?
Internationalization of resources
LSE
LSE or SME?
Limited resources
SME
LSE or SME?
Externalization of resources
SME
LSE or SME?
Deliberate strategy formation
LSE
LSE or SME?
Adaptive decision-making mode in small incremental steps
LSE
LSE or SME?
Emergent strategy formation
SME
LSE or SME?
Entrepreneurial decision making
SME
LSE or SME?
Owner/manager is directly and personally involved
SME
LSE or SME?
Formal/hierarchical organization
LSE
LSE or SME?
Independent of one person
LSE
LSE or SME?
Informal organization
SME
LSE or SME?
The owner has the power to inspire and control the organization
SME
LSE or SME?
Mainly risk-averse
LSE
LSE or SME?
Focus on long term opportunities
LSE
LSE or SME?
Sometimes risk-taking, sometimes risk-averse
SME
LSE or SME?
Focus on short-term opportunities
SME
LSE or SME?
Low flexibility
LSE
LSE or SME?
High flexibility
SME
LSE or SME?
takes advantage of economies of scale and scope
LSE
LSE or SME?
takes limited advantage of economies of scale and scope
SME
LSE or SME?
Uses advanced techniques e.g. databases, external consultancy
LSE
LSE or SME?
Information is gathered in an informal and inexpensive way e.g. internal resources, face-to-face communication
SME
What is the intended strategy?
The planned strategy
What is the emergent strategy?
The not planned strategy
What are the 3 steps of incremental change/strategic drift?
- Incremental change of company (according to environmental change)
- Strategic drift (company is drifting away from the environmental change)
- Transformational change by company or death
What are economies of scale?
Accumulated volume in production this results in a lower cost price per unit
What are economies of scope?
Reusing a resource from one business in additional businesses or countries
What is globalization?
Reflects the trend of firms buying, developing, producing and selling products and services in most countries and regions of the world
What is internationalization?
Doing business in many countries of the world, often limited to a certain region
What is industry globalism?
nine strategic windows
The degree of industry globalism depends on the international competitive structure within an industry
Industry Globalism - Global
nine strategic windows
many interdependencies between markets, customers, and suppliers where the industry is dominated by a few large, powerful players
Industry Globalism - Local
nine strategic windows
represents a multi-domestic market environment where markets exist independently of one another
Preparedness for internationalization
nine strategic windows
The firm’s ability to carry out strategies in the international market place
Preparedness for internationalization - Mature
nine strategic windows
Well prepared company
Preparedness for internationalization - Immature
nine strategic windows
Not well prepared company
What does EPRG stand for?
Ethnocentric - Polycentric - Regiocentric - Geocentric
What does ethnocentric mean?
The home country is superior and the needs of this country are the most relevant. Controls are highly centralized, organization and technology will be the same as the home country.
What does polycentric mean?
Multidomestic, each country is unique and should be targeted in a different way. It recognized different conditions in countries and tries to adapt to this. Control is decentralized
What does regiocentric mean?
World consists out of regions. Firm tries to integrate its marketing within regions but not across them.
What does geocentric mean?
Global. The world gets smaller and smaller. Firm may offer global products and concepts but with local adaption
What is global marketing?
The firm’s commitment to coordinate its marketing activities across national boundaries in order to find and satisfy global customer needs better than their competition
What is glocalization?
The development and selling of products/services intended for the global market but adapted to suit local culture
what is global integration?
Recognizing the similarities between international markets and integrating them into the overall global strategy
What are the major drivers for a shift towards global integration? (8)
- Removal trade barriers
- Global accounts or customers
- Relationship management
- Standardized worldwide technology
- Worldwide markets
- Global village
- Worldwide communication
- Global cost drivers
What is market responsiveness and on which 3 grounds is this done
Responding to each market’s needs and wants
- cultural differences
- regionalism
- deglobalization
What is artificial intelligence?
Use of machine learning in combination with human creativity to create a more engaging customer experience.
this in order to attract, engage and retain customers interests and business
What is the definition of internationalization motives?
The fundamental reasons for internationalization
What are the 4 main motives to internationalize
- market seeking
- efficiency seeking
- resource seeking
- strategic asset seeking
Why do companies go international with a market-seeking motive?
to find new companies
Why do companies go international with an efficiency-seeking motive?
to lower costs associated with performing economic activities and with the aim of rationalizing their existing operations
Why do companies go international with a resource-seeking motive?
to access resources that are not readily available at home or resources that can be obtained for a lower cost
Why do companies go international with a strategic asset-seeking motive?
to obtain strategic assets which may be critical to their long term strategy but are not available at home
What are proactive motives to internationalize? (6)
- Profit and growth goals
- Managerial urge
- Technology competence/unique product
- foreign market opportunities/ market information
- economies of scale
- tax benefits
What are reactive motives to internationalize? (6)
- competitive pressures
- domestic market: small and saturated
- overproduction
- unsolicited foreign orders
- extended sales of seasonal products
- proximity to international customers
What does managerial urge mean?
Manager’s commitment and motivation reflect the desire and enthusiasm to drive internationalization forward
What are internationalization triggers?
Internal or external events taking place to initiate internationalization
What are examples of internal export triggers? (3)
- perceptive management
- specific internal event
- importing as inward internationalization
What are examples of external export triggers? (5)
- Market demand
- Network partners
- Competing firms
- Trade associations and other outside experts
- Financing
What is perceptive management?
Perceptive managers gain early awareness of developing opportunities in overseas markets and become knowledeable about markets
What is inward/outward internationalization?
Imports (inwards) as a preceding activity for the later market entries (outward) in foreign markets
How is market demand an external export trigger?
International markets can cause demand for products of some companies to grow, pushing the makers of the products into internationalization
How are network partners an external export trigger?
access to external network partners may encourage the company to use this as a key source of knowledge in triggering the internationalization process.
How are trade associations and other outside experts an external export trigger?
formal and informal meetings among managers from different firms at business meetings, export agents, governments, chambers of commerce, banks
How is financing an external export trigger?
Resources are required to fund international activities, need to raise necessary funds through grants, debt and or equity financing
What are barriers hindering internationalization initiation? (8)
- insufficient finances
- insufficient market knowledge
- lack of foreign market connections
- lack of export commitment
- lack of capital to finance expansion into foreign markets
- lack of productive capacity to dedicate to foreign markets
- management emphasis on developing domestic markets
- cost escalation to high export manufacturing, distribution and financing expenditures
Which three categories are there within barriers hindering the further process of internationalization
- general market risks
- commercial risks
- political risks
Which barriers for the further process of internationalization are there within the category of general market risks? (7)
- comparative market distance
- adaption to foreign markets
- competition from other foreign markets
- adapting products and services to new local conditions
- difficulties in finding right distributor in foreign market
- differences in product specifications in foreign market
- complexity of shipping services to overseas buyers
Which barriers for the further process of internationalization are there within the category of commercial risk? (4)
- exchange fluctuations when contracts are made
- failure of export customers to pay due to contract dispute, bankruptcy, refusal
- delays/damage in the export shipments and distribution process
- difficulties in obtaining export financing
Which barriers for the further process of internationalization are there within the category of political risks? (7)
- foreign government restrictions and import restrictions
- national export policy
- foreign exchange controls
- lack of governmental assistance in overcoming export barriers
- high foreign tariffs on imported goods
- complexity of trade documentation
- lack of tax incentives for companies that export
What does de-internationalization mean?
A process determinde by internal and external factors, where the multi-national company shifts to a strategic configuration that has a lower international presence
What are porter’s 5 forces?
- new entrants
- supplier
- buyers
- substitutes
- market competitors
What is market myopia?
the failure of a company to define its organizational purpose from a broad consumer orientation
What is a sharing economy?
A business model in which customers are able to make short-term rentals of assets owned by service providers.
