Post on 14-Nov-2014
description
R. Ravi NairR. Ravi Nair
Part 1
COLONIZATION
GLOBALISATION
GLOCALISATION
Globalisation
Global Perspective
7
3. Economy
1. Competition
1. Competition
2. TechnologyPrice Product
Promotion Place orDistribution
6. Geography andInfrastructure
Foreign Environment(Uncontrollables)
7. Structure ofDistribution
3. Economy
5. Political-Legal
Domestic environment(Uncontrollables)
(Controllables)
2 .Technology
4. Culture
5. Political-Legal
4. Culture
Target Market
External Perspective
Anticipated barrier reduction
– regulatory and non-regulatoryWTO/Standards
/Quotas/Documentation
Growing integration of
economies/ societiesASEAN,NAFTA,EU,
Free Market Play
External External EnvironmentEnvironment
Results in potential for Wealth CreationResults in potential for Wealth Creation
Internal Perspective
Use of Technology & Hubs
First Mover Advantage
Market Saturation
InternalInternalEnvironmentEnvironment
Impetus to seek avenuesImpetus to seek avenues / potential for Wealth Creation potential for Wealth Creation
Emerging Market Scenarios
•Drivers
•Restrainers
•Emerging Trends
Drivers
• Disposable incomes increasing
• Demographics• Gen X & Y making their presence
across the globe• Accessability – TV, Internet• Convergence – western lifestyle
aspirations• More education/ western education• Emergence of middle/ rich class• Competition in market-niche• Global strategy/action. • Open vs Closed trade
Restrainers….
• Culture
• National controls
• Nationalism
• Trade blocks
• Open vs Closed
Economy
Emerging Trends….
Emergence of :
•technologies/ industries
•new markets
•new competitors
•goodwill
•importers turning exporters
Leveraging expertise….
Company Strategy,Structure,
and Rivalry
DemandConditions
Relatedand Supporting
Industries
FactorConditions
GovernmentGovernment
Source: Michael Porter, Source: Michael Porter, The Competitive Advantage of NationsThe Competitive Advantage of Nations
ChanceChance
Value Equation….
V =BP
Where:• V = Value• B = Perceived Benefits - Perceived Costs*• P = Price
* For example, switching costs
The Value Equation
Value for Customer
Maximising benefits for Company through value addition to the customer….
One’s One’s own cultureown culture
SocialSocialNormsNorms
Commn. Commn. stylesstyles
Background Background InformationInformation
BusinessBusiness PracticesPractices
AdaptabilityAdaptability Building Building RelationsRelations Commun.Commun.
Analysis Analysis of of
InformationInformation TeamworkTeamwork ListeningListening LeadershipLeadership
EmotionalEmotionalIntelligenceIntelligence
PersonalPersonal MotivationMotivation HumilityHumility Cultural Cultural
SensitivitySensitivityRiskRisk
TakerTaker
Knowledge
Skills Set
Attitude
Interlinkages - PersonnelEffective Global Manager
Interlinkages - Legal…
Legal Framework – laws impacting
on the transaction :
•Domestic laws (e.g. export laws,
foreign corrupt practices etc) and
•International laws (international
agreements, bilateral and
multilateral agreements, arbitration
etc.)
Interlinkages………financial
Financial….
Contractual
Typical issues in contractsTypical issues in contracts
•Incomplete clauses
•Misunderstanding
•Improper translation
•Differences in interpretation
•Failure to provide an arbitration
clause
•Using inappropriate forms
•Change orders/ variation clauses
Part 2
Can we go global??
Yes, if …
• Long term global commitment-purpose, vision
• Global market/ marketing information/ systems in place
• Critical mass of skill, resources, contacts, lines of finance
• Marketing culture-value• Handle change management,
chaos and innovation-for profitability
• Flexibility, responsiveness, ability to move quickly
Achieving Globality….
Strategic Focus
Do we compete?• PLC
• Overall size decreases or increases
• Increased share of existing market ???
• Enlarged customer size
• Grab share from competitors
• Selection of markets
Segmentation
• Segmentation basis
• Market size – rate of
growth
• Geography
• Economic and political
integration
• Language/ culture
• Competitive Position/
opportunity/ challenge
The organisation should be able to manage its market to be
SUCCESSFUL
Segmentation Issues
Where to go…
Right time to adapt
glocalisation strategy!!!
Identification of new global
segments
Geographic scope
Size and number of
segments
Global standard versus
nationally adapted products?
Competition Analysis
Differential advantage
•Superior position•Superior skills•Superior resources
Whatever the source of differential advantage, it must offer real value to the customer in that it meets his/her needs in a distinctive way, and is in some way better than the competition. It is the meeting point of the three C's of customer, competition and company resources.
Wage costs
Quality
Scale
Speed
Time
Variety
????
1960 1970 1980 1990 2000
Marketing Mix
Product Dimension
•Primary functions
•Secondary functions
•Quality characteristics
•Operation/
maintenance
•Image (for global
corporation)
•Compatibility
•Complements and
substitutes
Pricing
Types of Pricing
• Cost plus
• Market pricing
• Competitors
• Price skimming
• Market penetration
• Psychological pricing
• Differential pricing
• ‘Package’ pricing
Objectives
• Quick profits
• Market share
• Middleman
support
• Image
• What Else??
Investing in the Enablers of Growth
Product
Price/ Cost
Place
Promotion
ProcessesPeople/ Climate
“Sales over night” “Brand over time”
... Keeping the engine running
... Tactical
... Share of the market
... While changing the fan belt
... Putting the pitch before the product (Strategic)... Share of mind... Making the latent blatant
Positioning
Cultural Lens – Difference in International and National promotions
Promotions
Distribution Basics
On-time, In-place is a
vision of global
distribution
•Distribution is a process
•Channels are the
pathways
•Logistics is the
integrated management
of distribution
Retailing MarketEntry Strategy Framework
D
Organic
A
Chain Acquisition
C
Franchise
D
Joint Venture
Culturally CloseCulturally Close
Culturally DistantCulturally Distant
Difficult Difficult
to Enterto Enter
Easy Easy
to Enterto Enter
Market Entry Strategy
•Exporting
•Licencing
•Contract manufacturing
•Management contracting
•Joint ventures
•Subsidiaries
•Company acquisition
Typical Organization Structures
Typical textbook structure
Asia Division
US Division
EuropeDivision
• Centralization
• > Complexity
• Building in > flexibility
• Super national
marketing structures
The 7 S Framework
•Strategy itself - supported by
•Skills - what distinctive core tasks is the company good at
performing?
•Shared values - what is the culture of the company? What
behaviour or achievements are rewarded?
•Style - what is the management style?
•Staff - what are the people like? What is their educational or
business background? What is likely to motivate them? How is
their morale?
•Systems - what formal systems are in place that may help (or
hinder) implementation?
•Structure - what structures are in place that may help (or hinder)
implementation? Is there a flat management structure?
Evolution of a Global Enterprise
Stage 1: Global market assessment
Stage 2: Target market strategy,
strategy partnership and marketing
investment
Stage 3 : Marketing investment,
exporting, licensing
Stage 4: Investment in foreign
manufacturing and R&D
Stage 5: Integrated global
enterprise; serve global markets
with global resources PerformancePerformance
REVIEW ….REVIEW ….
RESTRATEGISE…RESTRATEGISE…
REIMPLEMENT……..REIMPLEMENT……..
Organizations should continuously evaluate, be sensitized and focus on international business by Extension, Adaptation and Creation
The RRR Concept
Assess products
and foreign
markets: choose
products and target markets
Setting objectives and goals
Choosing the entry mode: export,
contractual agreement
s, licensing,
joint ventures, strategic
partnership or
investment
Designing the
marketing plan:
productprice,
promotion, place and
probe
1 2 3 4
Targetmarket
Control system: monitor operations, revise or
fine tune entry strategy, and penetrate the
market
Entry operations
The RRR concept….a Continuous The RRR concept….a Continuous ProcessProcess
Once the organization evolves to a Once the organization evolves to a
global level, one can call the company a global level, one can call the company a
truly global company because by them, truly global company because by them,
they would ask where in the world do they would ask where in the world do
we:we:
•Locate manufacturing•Sell products•Hire skilled managers•Raise Capital•Procure our inputs•Conduct R&D for product development•Locate customer service, data entry and other labor intensive activities
Key Imperatives….
Key Success Factors
• Continuous commitment to the global market
• Cultural Quotient
• K.I.S.S
• Economies of scale
• Adaptability, flexibility and extension
• Legitimizing diversity
• Integrating coordinating independence
• Innovate new competitive but workable strategies
• CAGE
• Branding – Glocalisation
Takeaways
•Think Globally – Act Locally
•Collaborative Competition
•Barriers to Entry for new
entrants
•Know product
•Know market – the
battlefield
•Know Competition (the
enemy) and yourself
•Mega-marketing (Power &
Politics)
Thank You