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Effects of globalization in marketing strategies
Globalization and its impact on business strategies
Globalization strategy
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A Globalization Strategy
Global, Multinational and International strategies aggregated together as three pillars of 'A Globalization Strategy' or can define 'A Globalization Strategy'. These three pillars of 'A Globalization Strategy' empower an organization to achieve its designed-aim for an international expansion.
In developing 'A Globalization Strategy' PEST analysis comes into play. According to PEST analysis the environmental scrutiny of political, economic, social and technological aspects that are apropos to steer on a global scale.
Three pillars of 'A Globalization Strategy' are -
Global Strategy: View the global market as local bazaar and supplying the bazaar with local variation in the product. This leads to global production and results in competitive advantage on global basis.
Multinational Strategy: Basically focuses on the tastes of local bazaar. The participation of company in a number of local bazaar besides its national market. Hence a particular strategy should be adopted to cater to the needs of each different country considering its consumer needs. This leads to a competitive advantage in each different country.
International Strategy: Key focus is towards the national market but is open-minded to flourish in overseas market too. Thus making the national market business strategy a master plan on how to prosper in cutthroat international market.
Red Bull is an energy drink that originated from Thailand but was sold for the very first time in its home market Austria on April 1,1987. Austrian entrepreneur Dietrich Mateschitz invented the formula of Red Bull energy drink. The nomenclature of Red Bull energy drink was derived from Thailand's pre-existing energy drink named 'Krating Daeng' where 'Krating...
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...ections and DVR's is the link to connect all the antenna's ergo the antenna can be fancied to be in the cloud. Coverage area is so widely spread that the customer can simply launch Aereo on any compatible device and watch from anywhere. Aereo is compatible with phones, tablet and computers thus reducing the cost of buying a new hardware.
Over the air television on internet connected devices concept by Aereo is facing ongoing legal disputes with the owners of several broadcast television channels. They are questioning the business model of Aereo for illegally acquiring the retransmission consent.
New technologies like Aereo often disrupt the existing economic and legal arrangements and such disruptive innovation often create a turmoil in the market stake of existing big giant companies, hence such ingenious product invention is termed as disruptive innovation.
To obtain this service, the subscriber has to buy a Tivo set top box and the Tivo service. The box is installed between the broadcast feed and the television set and is able to store up to 30seconds of live programs before sending to the TV. Although this introduces a delay in the signal, it ensures that the viewer is able to rewind and pause live TV, skip commercials, etc.
Television networks are allowed to transmit their content over public airwaves with the condition that the content is free to the public. The startup Aereo takes advantage of this, and leases small antennas to each subscriber, these antennas are used by Aereo to access the aforementioned public airwaves, and stream the signals directly to their customers electronic devices. Usually cable, and satellite companies pay retransmission fees to carry the broadcaster's content, Aereo does not and the broadcasting companies believe Aereo’s retransmission of their signals is illegal. Aereo has interpreted these laws differently, and because of the way they have organized their service they believe they do not have to pay retransmission fees. They believe they are assisting the action of accessing the public airwaves in a way their customers can already access legally.
Today, many companies enter the global market, and some companies have become extremely successful in the global marketplace and others still struggling. In Theodore Levitt’s article “The Globalization of Markets”, he states that a well managed corporation focuses on selling standardized products with high quality and low priced instead of focuses on selling on customized products with high cost. Levitt defines the differences between multinational corporation and global corporation, and adopts many specific examples to proves his view. He defines the multinational corporation who operates in many countries and adjust its product based on the taste of specific region. This will result in a high cost to produce the product because company have to input more resource into each individual product. However, global corporation sells similar product worldwide at relative low cost. According to Levitt, the cultural differences are becoming more and more “homogenized”; therefore, becoming a global corporation will lead to the successful of the company in the global market.
Business strategy is the means by which firm’s plans to achieve its goals and objectives. It can also be termed as organization long-term planning. The strategy covers periods between 3-5 years and sometimes longer. Businesses use two major types of strategy, general or generic and competitive strategies. The overall strategy involves strategies of growth, globalization and retrenchment. The competitive advantage includes low pricing, product and customer differentiation. We will look at the business strategy used by Marks and Spenser (Cole, 1997). The company is a British multinational located at Westminster London and specializes in clothes and luxurious food products.
Red Bull is a sweet, caffeinated drink aimed to give consumers the high energy kick. Available only in rather expensive 250ml cans, 350ml bottles, with 4 packs and only two ‘flavours’ (original or sugar-free). It contains caffeine, taurine, glucuronolactone, and B vitamins. Founded in 1984 by Austrian businessman Dietrich Mateschitz, Red Bull has become the worlds leading energy drink, a staple in many young, and active people’s lives.
Background - RedBull was launched in 1987 by GmbH and was derived from a Thai drink KratingDaeng. Austria was the first place where Red Bull started its business in 1987.It started its business in Hungary in 1992 and the United states in 1997. These were the first foreign market for a Red Bull energy drink. Itsslogan “RedBull Gives You Wings” started in German...
The globalization of the major business strategy. It means the company has to integrate the strategy in all the places of business operation.
The same can be said about a localization strategy. Localization may give a firm a competitive edge, but if it is simultaneously facing aggressive competitors, the company will also have to reduce its cost structure, and the only way to do that may be to shift toward a transnational strategy. This is what Procter & Gamble has been doing. Thus, as competition intensifies, international and localization strategies tend to become less viable, and managers need to direct their companies toward either a global standardization strategy or a transnational
...d i.e. to use a mix of both the strategies. Some academic experts also presented the same arguments which stated that the company should use standardized tactics and adapting others to difference market is necessary. Such authors believes that both the standardization and adaptation are nothing but a matter of degree to use in international marketing strategy. Also McDonald strategy is the best example of such arguments where the company has globalized it brand but localized its marketing strategies. Considering the success of McDonald I would strongly recommend that a right balance of standardization and adaptation is need to ensure good growth and success in international marketing. Hence it can be concluded that if a company wants to be successful at global level, then it should include elements of both standardized and adaptation approach in its marketing mix.
The second strategy is Market development strategy which focuses on selling the existing product in a completely new market. The organization targets the new geographical area, region which share the same demographic profiles than in the home country. The organization does not have to make a huge change in the product nor they have to change their marketing strategies. There are few of the following ways through which this could be done:
Svensson, G., 2001. 'Globalization' of Business Activities: A 'Global Strategy' Approach, Management Decision, 39(1), pp.6-18.
Globalization describes the increased movement of people’s knowledge, ideas, and money across national borders that have led to increased interconnectedness between the world 's populations, economically, politically, socially and culturally. Sometimes globalization is thought of as the global marketplace, and this process has social and political implications as well. Globalization is thought of throughout the world as making societies educated and wealthier through trade to people around the world. Some people see globalization as a factor in the exploitation of the poor and as a threat to traditional cultures by the wealthy, as modernization changes societies. Location, rather than resources, has pushed places to the center
International business refers to the commercial transactions across nation borders. The different ways international business is being done include trade, foreign direct investment, licensing, franchising and management contracts. Over the last five decades, statistics show that international trade and investment has grown faster than the domestic economies. The globalization in international business will continue to accelerate with the emergence of national economies, advancements in technology, increase in FDI, similarity of needs and wants as driving factors. Considering that 95% of potential customers are outside the US, it is difficult to not embrace today’s global economy. The continuing growth will present opportunities and challenges
International Marketing, at its simplest level, involves the firm making one or more marketing mix decisions across national boundaries (Jobber, 2010). At its most complex level, it involves the firm establishing manufacturing facilities overseas and coordinating marketing strategies across the globe (Jobber, 2010). There are various reasons for going global, some of which are: to find opportunities beyond saturated domestic markets; to seek expansion beyond small, low growth domestic markets; to meet customers’ expectations; to respond to the competitive forces for example the desire to attack an overseas competitor; to act on cost factor for example to gain economies of scale in order to achieve a balanced growth portfolio. The methods of market entry that could be used are indirect exporting (for example, using domestic –based export agents), direct exporting (for example, foreign –based distributors), licensing, joint venture and direct investment. I found this par...
Globalisation is a very complex term with various definitions, in business terms, “globalization describes the increasingly global nature of markets, the tendency for transnational businesses to configure their business activities on a worldwide basis, and to co-ordinate and integrate their strategies and operations across national boundaries” (Stonehouse, Campbell, Hamill and Purdie, 2004, p. 5).