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Strategies for penetrating an international market
Strategies for penetrating an international market
International corporate level strategies
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Phillips, of the Netherlands and Matsushita, of Japan are both companies that focus on electrical technology. With their prominence being located in the consumer electronics industry, it is important to note that the world as a whole is moving towards a more technological focus. As the world is moving in the direction of a more technological society with the consumer electronics industry growing, it was suitable for both Phillips and Matsushita to expand their horizons and operate internationally. The growing demand of technology requires a need for companies to operate on a global scale. Moreover, companies also find foreign operation as a means of cutting costs while still producing quality products through the use of outsourcing. The ultimate financial goes is to meet the needs of a market and generate a profitable turn in the process, which is accessible through foreign commerce. Were both Phillips and Matsushita to decide to stay local, they would quickly lose profit to a larger corporation that is driving to meet the global needs of its consumers and eventually be bought out or simply go bankrupt.
Phillips built its success on a worldwide portfolio of responsive national organizations. The company chose to utilize a localization strategy. This means that they focused on altering the properties and characteristics of their product’s to suit the foreign market’s language, political, legal, and cultural differences. In order to concentrate on local responses, they used highly self-sufficient national organizations but further on adopted a strategy of having each singular product be limited to one specialized division.
Matsushita on the other hand, built its success on its centralized, highly efficient operations in Japan. Un...
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...al for the companies to have all of their resources be independent, rather than relying on other aid through outsourcing.
Ultimately, each of these corporations within the consumer electronics industry have come a long way. They have survived in a business society that has readily evolved and moved towards a whole new era of technology. It is still imperative that corporations do business internationally on a global scale in order to better meet the need of consumers within their industry. However, the ways of doing this have altered with a number of strategic possibilities. Phillips and Matsushita each incorporated a different strategy from one another, with each seeing its profits and downfalls. As the economy and industry have evolved, so must Phillips and Matsushita in order to maintain a stance of being a power player within the consumer electronics industry.
his company, John Lin, the CEO and founder of Shang-Wa, approaches Bernard Lester, CEO of Lester Electronics with a serious proposal to form and partnership and expand the business in to a neighboring Asian country. Lester Electronics however, has to decide whether a partnership is the best way to go, or if acquiring Shang-Wa outright would be more beneficial. This paper will go over any issues and opportunities associated with this scenario.
Both companies’ changing strategic postures and organizational capabilities led to the major restructuring each company was forced to undertake as its competitive position was eroded. However, it is extremely difficult to overcome deeply set administrative heritage. Although Matsushita and Philips followed different strategies - classic "global" and "multinational" models respectively, both of them proved to have limitations.
The rise in globalization over the last few decades has helped facilitate and encourage corporations to expand into international markets. This paper will review the five common international expansion entry modes, and the pros and cons of each method. Finally, my employer is in the technology industry and I will breakdown and recommend which entry mode would work best for international expansion.
According to the article “Restoring American Competitiveness” by Gary P. Pisano and Willy C. Shih, the United States industries have worn down competition through the damages from outsourcing manufacturing. There are several issues that have caused serious problems to the U.S. economy, which have caused the decline of trade due to shortage of innovation and competition. Theses problems are lack of funding for research and development by government and businesses and poor financial decisions made by management for outsourcing. There are several recommendations that the government and business executives can do to rebuild U.S. industries.
General Motors is knocking on the door to world class business performance. Ohmae’s five stages of global operation support General Motors aspirations. From stage one to stage five there are significant differences to becoming a global organization. For instance, stage one, states that a company supports arm’s length customer export activity by a domestic company that links up with local and distributors to function. This stage represents the entry level global corporation. General Motors is at stage 4 of Ohmae’s five stages of becoming a global corporation, because it has exemplified the following traits: Systems and tools used globally not just at headquarters, R&D, Engineering and other business operations have a global focus, and all support functions are applied globally. (MFGO 601, WK. #2 Lecture Notes) An example of Ohmae’s, stage ...
Each country has its own culture, with subcultures inside the dominant culture (Schaefer, 2009, p.69). “Culture is the totality of learned, socially transmitted custom, knowledge, material objects, and behavior” (Schaefer, 2009, p.57). Values, artifacts, and ideas are also part of culture (p57). With globalization there is the integration of these cultural aspects, as well as language, social movements, and ideas throughout the world (Schaefer, 2009, p.20). Internationalization helps with this integration. Internationalization is the process of planning and implementing products and services so that they can easily be adapted to specific local languages and cultures (Linfo, 2006). Numerous American retail firms have expanded to other countries. Many have been quite successful due to their internationalization. However, failure to study the culture, retail practices, and consumer market of the country they intend to expand to can be quite costly. Although Home Depot is one of the world’s largest home improvement stores, their expansion to Chile cost them enormous financial loss, resulting in their divestment (Bianchi & Ostale, 2006, section 1, para3). This paper will look at successful international expansion of Home Depot stores, analyze what mistakes were made in Chile, and make suggestions of what could have been done differently.
Philips versus Matsushita Case Synopsis Two major competitors in the global consumer electronics industry, Philips of the Netherlands and Matsushita of Japan, both have extensive histories that can be traced back more than a century. They have each followed different strategies and have had significant capabilities and downfalls along the way. In general, Philips built its tenured success on a portfolio of responsive national organizations. On the other hand, Matsushita based its global strategy on a centralized and efficient operation through Japan. As they developed and reorganized their international strategies, each company was forced to undertake its strategic posture and restructuring as its competition position fell.
III. Situation Analysis Company Analysis During the 1970's, HD was facing a decline in market share due to increased competition with Japanese companies. By phasing out weak models, becoming more selective, and limiting sales and promotions, HD was able to carve out a niche in the marketplace which it enjoys today. Now again, faced with a period of decline, HD is relying on its newly adopted marketing objectives. First, HD needs to expand its potential customer base to include enthusiasts and non-enthusiasts.
This case study analysis is on Samsung Electronics Company (SEC) and how it has climbed up the ranks in the past decade via calculated marketing strategies, extensive market research and analysis, and a risky bet on how the market will evolve. Samsung’s principle outlook took time and education from within and thereafter the general market.
Businesses tend to secure themselves financially and overlook certain characteristics, prior to expanding into international markets. For the purpose of this critical analysis case study, international markets are foreign other than the United States and the various consumers that inhabit them. Culture is a broad and vague concept. We will define culture as the values, beliefs and practices that a group of individuals hold. Culture is a major factor and businesses need to be conscious when expanding into foreign markets. The following paper will examine cultural issues that U.S. businesses must address before attempting to sell their products internationally, six problems Mattel faced expanding Barbie into foreign Chinese markets, and then
After the Second World War, Philips has become the leading consumer electronics company. There are several key capabilities that contribute to this success, including the capabilities of local subsidiaries, the shared leadership within management and the strong and consistent research.
This strategy possesses more control, and leadership designs the system that enables flexibility to develop within it (M&W). This is evident in Sony’s second mid-range plan (Ref). It sets the overall goal of achieving a Return on Equity (ROE) of 10% and an operating profit of 500 billion yen (ref). Sony has been devised into three sectors (Ref). These sectors are expected to develop unique strategies that will combine to achieve to the overall financial objective. The individual sectors use their own discretion to reach this
Finding the balance between standardisation and localisation is one of the towering problems that companies encounter when tapping international markets. So many times companies choose to standardise their marketing mix for international markets, either for cost efficiency reasons or the lack of reasonable global marketing strategy. (Singh, 2016)
Recalling the mission statement of SONY, Inc., “SONY’s mission is to become a leading global provider of networked consumer electronics, entertainment and services” (SONY, 2009, pg.15). This thoughtful corporate image has a number of reasons to attract consumers. What aspects make products better than other competitors? While the mission statement is appealing, it only favors a certain group of customers. Therefore, the environmental friendly competition and financial competition result in the long-term concern: marketing strategy. How should Sony Ericsson plan their marketing strategy to remain competitive in the market?
Currently in the global environment, there is a strong sense of competition that must be achieved through better performance, almost all firms are competing in international markets due to the reduction in barriers for capital and tariffs. With the new changes in both communication and technology, the consequences faced are that production processes are no longer within national boundaries but spread across (Debrah & Smith, 2002).