london met mk2004 chapter 1 textbook 0273706786 01 media light (1)
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Svend Hollensen
GLOBAL MARKETING4th Edition
1 Global marketing in the firm
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Hollensen, Global Marketing 4e, © Pearson Education 2008 1-2
Learning objectives
Characterize and compare the management style in SMEs and LSEs
Identify drivers for global integration and market responsiveness
Explain the role of global marketing in the firm from a holistic perspective
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Hollensen, Global Marketing 4e, © Pearson Education 2008 1-3
Learning objectives (2)
Describe and understand the concept of the value chain
Identify and discuss different ways of internationalizing the value chain
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Hollensen, Global Marketing 4e, © Pearson Education 2008 1-4
Structure ofGlobal Marketing 4e
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Hollensen, Global Marketing 4e, © Pearson Education 2008 1-5
Internationalization
Firms must decide whether to stay at home or strengthen the global position
Globalization reflects trend of buying, selling, and distributing products in many countries and regions of world
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Hollensen, Global Marketing 4e, © Pearson Education 2008 1-6
Figure 1.1 Nine strategic windows
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Hollensen, Global Marketing 4e, © Pearson Education 2008 1-7
EPRG framework of business activities
Ethnocentric
Polycentric
Regiocentric
Geocentric
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Hollensen, Global Marketing 4e, © Pearson Education 2008 1-8
What is this?
The firm’s commitment to coordinate its marketing activities across national boundaries in order to find and satisfy global customer needs better than the competition is known as ______.
Global marketing
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Hollensen, Global Marketing 4e, © Pearson Education 2008 1-9
What is this?
What term refers to the development and selling of products or services intended for the global market, but adapted to suit local culture and behaviour (think globally, act locally)?
Glocalization
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Hollensen, Global Marketing 4e, © Pearson Education 2008 1-10
Figure 1.2 Knowledge transfer
Core global business strategy (HQ)
CountryA
CountryB
CountryC
CountryD
Transferring global know-how and ‘best practices’ between countries with feedback to HQ
Internationalizing the strategy
Fee
dbac
k Feedback
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Hollensen, Global Marketing 4e, © Pearson Education 2008 1-11
Figure 1.3 Convergence of orientation
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Hollensen, Global Marketing 4e, © Pearson Education 2008 1-12
LSEs and SMEs
ResourcesFormation of strategy/
decision making processes
Organization
Risk takingFlexibilityEconomies of scale
and scopeUse of information
sources
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Hollensen, Global Marketing 4e, © Pearson Education 2008 1-13
Figure 1.4 Intended and emergent strategy
Realized strategy
Intended strategy
Deliberate strategy
Unrealized strategy
Emergent strategy
Source: Mintzberg, 1987, p. 14. Copyright © 1987 by the Regents of the University of California. Reprinted from the CaliforniaManagement Review, Vol. 30, No. 1. By permission of the Regents.
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Hollensen, Global Marketing 4e, © Pearson Education 2008 1-14
Figure 1.5 Incremental change and strategic drift
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Hollensen, Global Marketing 4e, © Pearson Education 2008 1-15
Figure 1.6 Entrepreneurial decision-making model
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Hollensen, Global Marketing 4e, © Pearson Education 2008 1-16
What is this?
When accumulated volume in production results in lower cost price per unit, _____ occur.
Economies of scale
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Hollensen, Global Marketing 4e, © Pearson Education 2008 1-17
Finding economies of scale
Reducing operating costs per unit and spreading fixed costs over larger volume due to ‘experience curve effects’
Pooling global purchasing gives the opportunity to concentrate global purchasing power over suppliers
Building of centres of excellence by using larger scale and focusing talent in one location
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Hollensen, Global Marketing 4e, © Pearson Education 2008 1-18
What is this?
When resources can be reused from one business/country in additional business/countries, _____ occur.
Economies of scope
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Hollensen, Global Marketing 4e, © Pearson Education 2008 1-19
Production orientation vs marketing orientation
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Hollensen, Global Marketing 4e, © Pearson Education 2008 1-20
Global coordination
Global integration
Market responsiveness
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Hollensen, Global Marketing 4e, © Pearson Education 2008 1-21
Figure 1.7 Global integration/ market responsiveness grid
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Hollensen, Global Marketing 4e, © Pearson Education 2008 1-22
Forces for global coordination/ integration
Removal of trade barriers
Global customersRelationship
managementStandardized
worldwide technology
Worldwide markets Global villageWorldwide
communicationGlobal cost drivers
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Hollensen, Global Marketing 4e, © Pearson Education 2008 1-23
Forces for market responsiveness
Cultural differencesRegionalism/ protectionismDeglobalization trend
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Hollensen, Global Marketing 4e, © Pearson Education 2008 1-24
Figure 1.8 7-S framework
Structure Strategy
SystemsShared Values
Style
Skills Staff
Source: ‘McKinsey 7S Framework’ from In Search of Excellence: Lessons from America’s Best Run Companies by Thomas J. Petersand Robert H. Waterman, Jr. Copyright © 1982 by Thomas J. Peters and Robert H. Waterman, Jr. Reprinted by permission ofHarperCollins Publishers, Inc.
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Hollensen, Global Marketing 4e, © Pearson Education 2008 1-25
Figure 1.9 The value chain
Inboundlogistics
OperationsOutboundlogistics
Marketingand sales
Service
Primary activities
Upstream value activities Downstream value activities
Procurement
Technology development
Human resource management
Firm infrastructure
Sup
port
act
iviti
es
Source: Reprinted with permission of The Free Press, a division of Simon & Schuster Adult Publishing Group, from Competitive Advantage: Creating and Sustaining Superior Performance by Michael E. Porter. Copyright © 1985, 1998 Michael E. Porter.
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Hollensen, Global Marketing 4e, © Pearson Education 2008 1-26
Figure 1.10 A simplified value chain
Research and development
Production Marketing Sales
and service
Upstream Downstream
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Hollensen, Global Marketing 4e, © Pearson Education 2008 1-27
Figure 1.11 Strategic pyramid
Research and development
Production Marketing Sales
and service
1. Strategic
2. Managerial
3. Operational
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Hollensen, Global Marketing 4e, © Pearson Education 2008 1-28
Figure 1.14 Value shop and the service chain
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Hollensen, Global Marketing 4e, © Pearson Education 2008 1-29
What is this?
What term refers to an extension of the conventional value chain, where the information processing itself can create value for customers?
Virtual value chain
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Hollensen, Global Marketing 4e, © Pearson Education 2008 1-30
Figure 1.15 Virtual value chain
Define information
problem
Organize, select, gather
information
Synthesize information
Distribute information
R&D Production Marketing Sales
and serviceValue
Value
Physical value chain
Virtual value chain
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Hollensen, Global Marketing 4e, © Pearson Education 2008 1-31
Creating value by using information
Managing risks
Reducing costs
Offering products and services
Inventing new products
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Hollensen, Global Marketing 4e, © Pearson Education 2008 1-32
For discussion (1)
What is the reason for ‘convergence orientation’ in LSEs and SMEs?
How can an SME compensate for its lack of resources and expertise in global marketing when trying to enter export markets?
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Hollensen, Global Marketing 4e, © Pearson Education 2008 1-33
For discussion (2)
What are the main differences between global marketing and marketing in the domestic context?
Explain the main advantages of centralizing upstream and decentralizing downstream activities?
How is the ‘virtual value chain’ different from the ‘conventional value chain’?
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Hollensen, Global Marketing 4e, © Pearson Education 2008 1-34
Nivea: A case study
Which degree of ‘market responsiveness’ and ‘global coordination/integration’ does Nivea represent?
Will Nivea be able to cross borders without any adaptation? If not, which elements should be adapted?
Which marketing problems does Nivea anticipate, when penetrating the US market?
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