GLOBAL MARKETING:

Svend Hollensen & M

Svend Hollensen
Banerjee,4TH edition

GLOBAL MARKETING
INTERNATIONAL 4th Edition

MARKETING

CP7; MBA/MKT 8702

Sudipta Sen Gupta
Session 7
Core Competence & Competitive Advantage
 Development of a firm’s
international competitiveness
• Macro level: Analysis of national
competitiveness
• Meso level: Competition analysis in an
industry
• Micro level: Value chain analysis

Hollensen, Global
INTERNATIONAL Marketing 4e, © Pearson
MARKETING 3808 Education 2008 2
 MACRO Analysis of national
competitiveness (Porter diamond)
Firm strategy,
Chance structure,
and rivalry

Factor Demand
condition condition
s s

Related and
Govern-
supporting
ment
industries

Hollensen, Global
INTERNATIONAL Marketing 4e, © Pearson
MARKETING 3808 Education 2008 3
 MESO Analysis of Market
Competitiveness: Porter’s five
forces model
New entrants

Industry level
Market level
Market
Competitors
Suppliers Buyers
Intensity
of rivalry

Substitutes

Hollensen, Global
INTERNATIONAL Marketing 4e, © Pearson
MARKETING 3808 Education 2008 4
 Five Sources of Market Strength
framework
•Horizontal collaborations
•Vertical collaborations
•Selective partnering arrangements-
upstream or downstream activities
•Related diversification alliances (with
complements and substitutes)
•Unrelated diversification alliances

Hollensen, Global
INTERNATIONAL Marketing 4e, © Pearson
MARKETING 3808 Education 2008 5
 Factors supporting
Born Globals
•Niche markets
•Flexibility, agility
•Advances in
process/technology
production
•Global partners &
alliances
•Communication
technology
Hollensen, Global
INTERNATIONAL Marketing 4e, © Pearson
MARKETING 8702 Education 2008 6
Startup Born Global Firms from
Emerging Markets

Hollensen, Global
INTERNATIONAL Marketing 4e, © Pearson
MARKETING 8702 Education 2008 7
 Value chain analysis
Customer

Perceived value/ Perceived value/

price A price B

S S
a Relative cost a
Firm A P
l
P Firm lB
M e M e
r r
a s a s
o o
r r
d d
R&D k & R&D k &
u u
e s e s
c c
t e t e
t t
i r i r
i i
n v n v
o o
g i g i
n n
c c
e e
Hollensen, Global Marketing 4e, © Pearson
INTERNATIONALs MARKETING 3808 Education 2008 s
8
 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.

Competitive triangle

Hollensen, Global
INTERNATIONAL Marketing 4e, © Pearson
MARKETING 3808 Education 2008 9
 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?

Relative cost advantage

Hollensen, Global
INTERNATIONAL Marketing 4e, © Pearson
MARKETING 3808 Education 2008 10
 What is this?

What term refers to a technique for

assessing relative marketplace
performance compared with main
competitors?

Competitive benchmarking

Hollensen, Global Marketing 4e, © Pearson Education 2008

11
 What is this?

What term refers to value chain activities

in which the firm is regarded as better
than its competitors?

Core competences

Hollensen, Global Marketing 4e, © Pearson Education 2008

12
 Figure 4.3 Leapfrogging
the experience curve

Hollensen, Global
INTERNATIONAL Marketing 4e, © Pearson
MARKETING 3808 Education 2008 13
 Figure 4.4 The roots of
performance and
competitive advantage
Performance
Tangible Assets

Competitive
advantage

Core competences

competences

Intangible Assets
Resources
Source: adapted from Jüttner and Wehrli, 1994.

Hollensen, Global
INTERNATIONAL Marketing 4e, © Pearson
MARKETING 3808 Education 2008 14
 Figure 4.5 Illustration of
the core competence

Hollensen, Global
INTERNATIONAL Marketing 4e, © Pearson
MARKETING 3808 Education 2008 15
Competitive Advantage

Hollensen, Global
INTERNATIONAL Marketing 4e, © Pearson
MARKETING 3808 Education 2008
Evolution Stages of Indian Software
Industry
➔ Stage 1: Pre 1984- Early entry
Exit of IBM over FERA, birth of TCS, achieving self
reliance in hardware
➔ Stage 2: 1985-91- New entry & experimentation
H/w price crash, deregulation of import licensing,
acceleration of domestic demand for software, software
policy delinked from h/w
➔ Stage 3: 1992-99 Imitative entry and liberalization
Entry of MNCs, phenomenal growth in demand for s/w
services, telecom and low cost internet access

Hollensen, Global
INTERNATIONAL Marketing 4e, © Pearson
MARKETING 3808 Education 2008
 ...Continued
➔ Stage 4: 2000-14 Domestic Consolidation &
Internationalization
Slowdown of domestic demand, Indian immigrants in
developed markets like US give boost to bodyshopping,
followed by outsourcing, software parks in Blr, Hyd, Chen,
Pune, Mub, Delhi NCR, and export focus. Growth in
technical, engineering and IT education through public and
private higher education institutes
➔ Stage 5: 2014-17
Start-Up India initiated. Domestic markets start growing
again, led by internet based start-ups/SMEs, biggest
companies continue to focus on US. US market increases
protectionism via H1B Visa levels, leading to shockwaves
across industry
➔ Stage 6: 2017 onwards Destination Unknown
Hollensen, Global
INTERNATIONAL Marketing 4e, © Pearson
MARKETING 3808 Education 2008
 Case Study:
Competitiveness of Indian Software Industry
a) What are the “supporting industries” for growth of India’s
Software Industry?
b) What role did the government play- positive or negative?
c) Post 2017, can India’s software industry survive the political
and commercial risks posed by its single largest export
market, US? How?

Pls do this as Class Activity and submit soft

copy end of Wed, Feb 10th class to get
ATTENDANCE.
For 5 Marks of Internal Assessment

Hollensen, Global
INTERNATIONAL Marketing 4e, © Pearson
MARKETING 3808 Education 2008
 Svend Hollensen

GLOBAL MARKETING
Thank You 4th Edition