Lecture 1; World business –

the competitive context.

PhD Krzysztof R. Nowakowski
 PhD Krzysztof R. Nowakowski
Lecture objectives;

 Major actors in the company’s

macroenvironment.
 Major actors in the company’s
microenvironment.
 Leavitts model of organization.
 Leadership styles; autocratic, democratic, and
laissez-faire.
 Definition of change management.
 Kurt Lewin’s forces of change.
 PhD Krzysztof R. Nowakowski
Introduction;

 Over the last 30 years or so, gradual significant changes

have taken place in global sourcing strategy.
 The cost-saving justification for international procurement
in the 1970’s and 1980’s was gradually supplanted by
quality and reliability concerns in the 1990’s.
 Most of the changes have been in the way business
executives think of the scope of global sourcing for their
companies and exploit various resultant opportunities as
a source of competitive advantage.
 PhD Krzysztof R. Nowakowski
A company’s environment consists of the actors
and forces outside of company that affect
management’s ability to develop and maintain
successful transactions with its target customers.

 The microenvironment consists of the forces close to

the company that affect its ability to serve its customers
– the company, marketing channel firms, customers
markets, competitors and publics.
 The macroenvironment consists of the larger societal
forces that affect the whole microenvironment –
demographic, economic, natural, technological,
political and cultural forces.
 PhD Krzysztof R. Nowakowski
Movie; Leavitts model;
https://youtu.be/u5MevXbAjSo
 PhD Krzysztof R. Nowakowski
Major actors in the company’s
microenvironment
 Middlemen are business firm that help the company find customers or
make sales to them. These include wholesalers and retailers who buy
and resell merchandise.
 Physical distribution firms help the company to stock and move
goods from their origin to their destination.
 Marketing services agencies – marketing research firms, advertising
agencies, media firms, and marketing consulting firm – help the
company to target and promote its product to the right markets.
 Financial intermediaries include banks, credit companies, insurance
companies, and other companies that help finance transactions or
insure risk associated with the buying and selling of goods.
 PhD Krzysztof R. Nowakowski
Major forces in the company’s macroenvironment.

 Changing age structure of the population.

 Geographic shifts in population.
 A better-educated workforce; the rising number of educated people will increase
the demand for quality products, books, magazines, and travel.
 The economic environment consists of factors that affect consumer purchasing
power and spending patterns. Markets require buying power as well as people.
 Total purchasing power depends on current income, prices, savings, and credit.
Managers should be aware of major trends in income and changing consumer
spending patterns.
 PhD Krzysztof R. Nowakowski
Major forces in the company’s
macroenvironment.
 The natural environment involves natural resources that are
needed as inputs by managers or that are affected by
marketing activities.
 Shortage of raw materials; air and water may seen to be infinite
resouces, but some groups see a long-run danger to these
supplies.
 Increase cost of energy and levels of polution.
 The technological environment consists of forces that affect new
technology, creating new product nad market opportunities.
 PhD Krzysztof R. Nowakowski
Major forces in the company’s
macroenvironment.
 The political environment is made up of laws, government
agencies, and pressure group that influence and limit various
organizations and individuals in society.
 Legislation regulating business; legislation affecting business has
increased steadily over the years.
 The cultural environment is made up of institutions and other forces
that affect society’s basic values, perceptions, preferences, and
behaviors.
 People grow up in a particular society that shape their basic
baliefs and values. They absorb a world view that defines their
relationship to themselves and others.
PhD Krzysztof R. Nowakowski
 PhD Krzysztof R. Nowakowski
Political - legal environment.

 Attitudes toward international buying; some nations are very

receptive to foreign firms and others are very hostile.
 Political stability.
 Monetary regulations; sellers want to take their profits in a
currency of value to them.
 Government bureaucracy; a fourth factor is the extent to
which the host gevernment runs an efficient system for helping
foreign companies; efficient customs handling, good market
information, and other factors that aid in doing business.
 PhD Krzysztof R. Nowakowski
Cultural environment

 Each country has its own cultural environment – its own

folkways, norms, and taboos.
 The way foreign consumers think about and use certain
products must be checked by the seller before planning the
marketing program.
 PhD Krzysztof R. Nowakowski
Deciding whether to go abroad…

 Not all companies need to venture into foreign markets to survive. Many
companies are local business that need only to market well in the local
marketplace.
 Other companies, however, operate in global industries, where their
strategic positions in major markets are strongly affected by their overall
global positions.
 Companies get involved in international marketing in one of two ways.
 Someone – a domestic exporter, a foreign importer, a foreign government –
asks the company to sell abroad. Or the company starts to think on its own
about going abroad.
 PhD Krzysztof R. Nowakowski
Movie; A leader must be a "people person"
| Richard Branson | WOBI;
https://youtu.be/sP3ZhcXOkSM
 PhD Krzysztof R. Nowakowski
Management philosophies;

 THE PRODUCTION CONCEPT; The production concept holds that consumers will
favor products that are available and highly affordable, and therefore
management should focus on improving production and distribution efficiency.
 The production concept is a proper philosophy in two types of situations;
 In the first, the demand for a product is bigger than the supply. In this case
management should look for ways to increase production.
 The second situation is one in which the product’s cost is high and improve
productivity is needed to bring it down.
 PhD Krzysztof R. Nowakowski
Management philosophies;

 THE PRODUCT CONCEPT; the product concept holds that consumers will favor
products that offer the most quality, performance, and features, and therefore the
organization should devote its energy to making continuous product improvements.
 THE SELLING CONCEPT; Many organizations follow the selling concept, which holds
that consumers will not by enough of the organization’s products unless the
organization udertakes a large selling and promotion effort.
 The selling concept is practiced hardest with unsought goods, those that buyers
normally do not think of buying, such as insurance, encyclopedias… The selling
concept is also practiced in the nonprofit area.
 PhD Krzysztof R. Nowakowski
Management philosophies;

 THE MARKETING CONCEPT holds that achieving organizational goals depends on

determining the needs and wants of target markets and delivering the desired
satisfactions more effectively and efficiently than competitors. This concept is a
relatively recent business philosophy.
 THE SOCIETAL MARKETING CONCEPT holds that the organization should
determine the needs, wants and interests of target markets and deliver the
desired satisfactions more effectively and efficiently than competitors in a way
that maintains or improves the consumer’s and the society’s well-being.
 The societal marketing concept questions wheter the pure marketing concept is
adequate in an age of environmental problems, resource shortages, rapid
population growth, world hunger and poverty, and neglected social services.
THANK YOU