example- student focus group guide
TRANSCRIPT
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Svend Hollensen
GLOBAL MARKETING 5th Edition
4 Development of the firm’s international competitiveness
Hollensen, Global Marketing 5e, © Pearson Education 2010 4-2
Learning objectives
¦ D e f i n e t h e c o n c e p t ‘ i n t e r n a t i o n a l competitiveness’ in a broader perspective from a macro level to a micro level
¦ Discuss the factors influencing the firm’s
international competitiveness ¦ Explain Porter’s traditional competitive-based
five forces model.
Hollensen, Global Marketing 5e, © Pearson Education 2010 4-3
Learning objectives (2)
¦ Explore the idea behind the ‘competitive triangle’
¦ Analyse the basic sources of competitive
advantage ¦ Expla in the s teps in compet i t ive
benchmarking
Hollensen, Global Marketing 5e, © Pearson Education 2010 4-4
Development of a firm’s international competitiveness
¦ M a c r o l e v e l : A n a l y s i s o f n a t i o n a l competitiveness
¦ Meso level: Competition analysis in an industry ¦ Micro level: Value chain analysis
Hollensen, Global Marketing 5e, © Pearson Education 2010
Figure 4.1 Development of a firm’s international competitiveness
Hollensen, Global Marketing 5e, © Pearson Education 2010 4-6
Analysis of national competitiveness (Porter diamond,1990)
Firm strategy, structure, and rivalry
Chance
Factor conditions
Related and supporting industries
Demand conditions
Govern- ment
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Factor conditions in Porter’s diamond
¦ Climate ¦ Physical infrastructure ¦ Natural resources ¦ Educational system ¦ Human resources ¦ Technological infrastructure ¦ Capital
Hollensen, Global Marketing 5e, © Pearson Education 2010 4-8
Demand conditions in Porter’s diamond
¦ Nature of home demand ¦ Size of home demand ¦ Economies of scale ¦ Transportation costs ¦ Buyer sophistication
Hollensen, Global Marketing 5e, © Pearson Education 2010 4-9
Porter’s (1980), five forces model
Market Competitors
Intensity of rivalry
New entrants
Suppliers Buyers
Substitutes
Market level Industry level
Hollensen, Global Marketing 5e, © Pearson Education 2010 4-10
Determinants of market competitiveness
¦ Concentration of industry ¦ Rate of market growth ¦ Structure of costs ¦ Degree of differentiation ¦ Switching costs ¦ Exit barriers
Hollensen, Global Marketing 5e, © Pearson Education 2010 4-11
Bargaining power of suppliers will be high if:
¦ Supply is dominated by a few companies ¦ Products are unique ¦ High switching costs ¦ Forward integration is possible ¦ Backward integration is unlikely
Hollensen, Global Marketing 5e, © Pearson Education 2010
Bargaining power of buyers is high if:
¦ Buyers are concentrated and/or purchase in large volumes
¦ Backward integration is likely ¦ Products are standardized ¦ Many suppliers exist ¦ Buyers earn low profits ¦ Industry product is unimportant to quality
of buyer’s products, but price is important
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Hollensen, Global Marketing 5e, © Pearson Education 2010 4-13
Threat of substitutes
Buyer’s willingness to substitute
Relative price and performance of substitutes
Costs of switching
Hollensen, Global Marketing 5e, © Pearson Education 2010 4-14
New Entrants: Barriers to entry
¦ Economies of scale ¦ Product differentiation and brand identity ¦ Capital requirements in production ¦ Switching costs ¦ Access to distribution channels
Hollensen, Global Marketing 5e, © Pearson Education 2010 4-15
Value chain analysis (Porter, 2001)
R&D Production Marketing Sales & services
R&D Production Marketing Sales & services
Customer
Perceived value/ price A
Perceived value/ price B
Relative cost Firm A Firm B
Hollensen, Global Marketing 5e, © Pearson Education 2010 4-16
What is this?
The ______ consists of a customer, the firm, and a competitor. The winning of the customer’s favour depends upon the perceived value offered compared to the relative costs between the firm and the competitor.
Hollensen, Global Marketing 5e, © Pearson Education 2010 4-17
What is this?
What term refers to a firm’s cost position as it relates the configuration of the activities in its value chain versus that of the competitors?
Hollensen, Global Marketing 5e, © Pearson Education 2010 4-18
What is this?
What term refers to value chain activities in which the firm is regarded as better than its competitors?
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Hollensen, Global Marketing 5e, © Pearson Education 2010 4-19
What is this?
What term refers to a technique for assess ing re la t i ve marke tp lace performance compared with main competitors?
Hollensen, Global Marketing 5e, © Pearson Education 2010 4-20
Competitive Benchmarking profile
Hollensen, Global Marketing 5e, © Pearson Education 2010 4-21
Blue Ocean Strategy: Kim and Mauborgne (2005)
¦ Red Oceans : Tough head- to -head
competition in mature industries often results in bloody red oceans of rivals fighting over a shrinking profit pool.
¦ Blue Oceans: The unserved market, where
competitors are not yet structured and market is relatively unknown. Here it is about avoiding head-to-head competition.
Hollensen, Global Marketing 5e, © Pearson Education 2010 4-22
What is this?
What term refers to tough head-to-head competition in mature industries which often results in nothing but fighting over a shrinking profit pool?
Hollensen, Global Marketing 5e, © Pearson Education 2010 4-23
What is this?
What term refers to unserved markets, where competitors are not yet structured and the market is relatively unknown?
Hollensen, Global Marketing 5e, © Pearson Education 2010 4-24
Value Innovation at Formule 1 ¦ Which of the factors that the budget hotel
industry took for granted should be eliminated? ¦ Which factors should be reduced well below
the industry standard? ¦ Which factors should be raised well above the
industry standard ¦ Which new factors (that the industry had
nevered offered) should be developed? ¦ Read Kim and Mauborgne (2005)
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Hollensen, Global Marketing 5e, © Pearson Education 2010 4-25
Hollensen, Global Marketing 5e, © Pearson Education 2010 4-26
Hollensen, Global Marketing 5e, © Pearson Education 2010 4-27
Hollensen, Global Marketing 5e, © Pearson Education 2010
Video Case Study: NIKE
¦ http://wps.pearsoned.co.uk/ema_uk_he_hollensen_globmark_5/170/43546/11147796.cw/index.html
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References ¦ Hollensen, S, (2011), ‘Global marketing’, Pearson
Education Limited, Essex, UK
¦ Doyle, P. (2008), Value-Based Marketing: Marketing Strategies for Corporate Growth and Shareholder Value, 2nd Edition. John Wiley & Sons.
¦ Kim, Chan. W., Mauborgne, R. (2005), Blue Ocean Strategy. Harvard Business School Press, Boston, Mass
¦ Porter, M.E. (1980) ‘Competitive Strategy’, Free Press,
New York.
Hollensen, Global Marketing 5e, © Pearson Education 2010 1-30
References
¦ Porter, M.E. (1990, 1998) The ‘Competitive Advantage of Nations’, Free Press, New York.
¦ Porter, M.E. (2001), ‘Strategy and the Internet’, Harvard Business Review, March 2001, pp. 62-78.
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Svend Hollensen
GLOBAL MARKETING 5th Edition
6 The Political and Economic Environment
Hollensen, Global Marketing 5e, © Pearson Education 2010
Learning objectives (1)
¦ Discuss how the political/legal environment will affect the attractiveness of a potential foreign market.
¦ Distinguish between political factors in the
home country environment and the host country environment.
¦ Describe the major trading blocs.
Hollensen, Global Marketing 5e, © Pearson Education 2010
Learning objectives (2)
¦ Define regional economic integration and identify different levels of integration.
¦ Discuss the benefits and drawbacks
associated with regional economic integration.
Hollensen, Global Marketing 5e, © Pearson Education 2010
Aspects of the political/ legal environment
Home country environment
Host country environment
General international environment
Hollensen, Global Marketing 5e, © Pearson Education 2010
The home country environment
¦ Promotional activities (sponsored by governmental organizations)
¦ Financial activities ¦ Information services ¦ Export-facilitating activities ¦ Promotion by private organizations ¦ State trading
Hollensen, Global Marketing 5e, © Pearson Education 2010
Kinds of information typically available
¦ Economic, social, political data on individual countries
¦ Summary and detailed information on aggregate global market transactions
¦ Individual reports on foreign firms
¦ Specific export opportunities
¦ Lists of potential overseas buyers, distributors and agents for various products in different countries
¦ Information on relevant government regulations
¦ Foreign credit information
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Hollensen, Global Marketing 5e, © Pearson Education 2010
Major types of political risk in the host country environment
Ownership risk
Operating risk
Transfer risk
Hollensen, Global Marketing 5e, © Pearson Education 2010
Effects of political risk
¦ Import restrictions ¦ Local-content laws ¦ Exchange controls ¦ Market control ¦ Price controls
¦ Tax controls ¦ Labour restrictions ¦ Change of
government party ¦ Nationalization ¦ Domestication
Hollensen, Global Marketing 5e, © Pearson Education 2010
Economic Environment ¦ Market size & Market growth: 2 milestones
¦ They depend on many factors such as economy, politics, culture, history, etc.
¦ But all of these are closely related to a country’s main economic activity.
Hollensen, Global Marketing 5e, © Pearson Education 2010
Types of economic activity
Primary Secondary Tertiary
Hollensen, Global Marketing 5e, © Pearson Education 2010
Figure 6.3 Forms of economic integration in regional markets Source: from Czinkota/Ronkainen. Global Marketing, 1E. © 1996 South-Western, a part of Cengage Learning, Inc. Reproduced by permission. www.cengage.com/permissions
Hollensen, Global Marketing 5e, © Pearson Education 2010
Regional Economic Integration § Free Trade Area e.g. NAFTA 1994 (US, Canada
and Mexico) - No barrier between members - Each member maintains its own policies to non-members
§ Customs Union e.g. Benelux Countries 1921 - Free Trade Area + - Common trade policy with respect to non-members
§ Common Market e.g. EEC 1958-1993 - Customs Union + - Mobile labour, capital, and technology
§ Economic Union (27 states as of 02/10/12!) - Common Market + - Harmonisation of monetary policies, taxation, & gov. spending
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Hollensen, Global Marketing 5e, © Pearson Education 2010
Major trading blocs
European Union Association of
South East Asian Nations (ASEAN)
Asia Pacific Economic
Cooperation (APEC)
North American Free Trade Area
(NAFTA)
Hollensen, Global Marketing 5e, © Pearson Education 2010
Hollensen, Global Marketing 5e, © Pearson Education 2010
Video Case Study: Globalization
¦ http://wps.pearsoned.co.uk/ema_uk_he_hollensen_globmark_5/170/43546/11147838.cw/index.html
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References
¦ Hollensen, S, (2011), ‘Global marketing’, Pearson Education Limited, Essex, UK