Professional Documents
Culture Documents
Marketing Assignment Questions
Marketing Assignment Questions
different from industry to industry as well as from country to country. Furthermore, the Board of
Directors regarded the PESTEL. as it falls by the gravitational force of "atomistic thinking" that makes
depart the empirical life from its empirical orbit in which it revolves day in, day out. With making all
these claims and justifications, the Board of the Directors also suggested that the international
marketing manager and her/his associates to use the mix of the PESTEL and CAGE (Cultural,
Administrative, Geography, and Economic distance) model as analytical tool to overcome all the
limitation of the analysis they made. As it was understood from the explanation of the international
marketing manager and her/his associates, as they got invaluable insights and feedbacks from the
Board of Director of the Bank. But, they (the international marketing manager and her/his
associates) believed that the Robinson Country Risk Index (RCRI) is more practical and fit with the
existing rule of the game of the global market than the suggested analytical tool. Their master
justification was that the "the matter of distance" is becoming shrinking and shrinking in the
presented world related with the emergence and development of "globalization" In response to this,
the Board of Directors argued that "the matter of distance is still alive and determine the
internationalization process as well as the entry mode of the companies to the international market.
Furthermore, the management argued that distance is not the matter of the kilometre that exists
between the home and the host countries. Rather, it could be the "Mental distance", "Cultural
distance", and so on, and that can speeding up the acceptance or the rejection rate of the newly
offered product in the host countries, as has been proved by the bundle of practices of the
multinational/transnational companies in the global market sphere. And now, the international
marketing manager and her/his associates found in the crossroad in relation to determining the
specific analytical tool which is/are going to be used. Having all the above indicated facts in your
mind, address the following questions:
1. If you were in the position of the international marketing manager, what would be your analytical
tool to deal with the Bank's internationalization process? Why?
As the international marketing manager of XYZ Interest Free Bank, I would consider a combination
of the PESTEL (Political, Economic, Social, Technological, Environmental, and Legal) analysis and the
CAGE (Cultural, Administrative, Geographic, and Economic distance) model to guide the bank’s
internationalization process. While the Board of Directors has expressed concerns about the
limitations of the PESTEL analysis, I believe that a comprehensive understanding of the external
environment is crucial for successful international expansion.
The PESTEL analysis provides a systematic framework for assessing the macro-environmental
factors that can impact the bank’s operations in potential host countries. It allows us to evaluate
the political stability, economic conditions, social and cultural trends, technological advancements,
environmental regulations, and legal frameworks of different markets. This analysis helps identify
opportunities and threats, and it provides insights into the potential risks and challenges that the
bank may face in each country.
However, I acknowledge the limitations of the PESTEL analysis, particularly its inability to capture
the nuances of industry-specific and country-specific driving forces for change. To address this
concern, I would integrate the CAGE model into our analysis. The CAGE model focuses on four
dimensions: cultural, administrative, geographic, and economic distance between countries. This
model helps us understand the unique characteristics and differences between the bank’s home
market and potential host markets.
By considering cultural distance, we can assess the compatibility of our interest-free banking
model with the cultural preferences and practices of the target countries. Administrative distance
allows us to evaluate the differences in regulatory frameworks, business practices, and
bureaucratic processes. Geographic distance helps us understand logistical challenges,
transportation costs, and proximity to target markets. Economic distance enables us to assess
factors such as income levels, market size, and economic development, which can impact the
demand for financial services.
Integrating the CAGE model with the PESTEL analysis provides a more comprehensive
understanding of the opportunities and challenges in each potential market. It allows us to identify
countries that have a favorable combination of factors, such as low cultural and administrative
distance, geographic proximity, and economic potential. This approach helps us prioritize markets
that are more likely to embrace our interest-free banking model and where the bank can achieve a
competitive advantage.
Furthermore, I would also consider using the Robinson Country Risk Index (RCRI) as an additional
tool to assess the risks associated with international expansion. The RCRI provides a
comprehensive evaluation of political, economic, and financial risks in different countries. It can
help us assess the stability of the regulatory environment, currency risks, and potential financial
vulnerabilities that may affect the bank’s operations.
In summary, my recommended analytical tool for the bank’s internationalization process would be
a combination of the PESTEL analysis, the CAGE model, and the RCRI. This approach allows us to
consider both the macro-environmental factors and the specific industry and country
characteristics, providing a holistic view of the potential markets and helping us make informed
decisions about international expansion.
2. Briefly explain about the international distribution strategies. And also, indicate the specific
distribution strategy that you think appropriate for the above mentioned Bank.
International distribution strategies refer to the methods and channels used by companies to deliver
their products or services to customers in foreign markets. These strategies are crucial for ensuring
efficient and effective distribution, maximizing market reach, and meeting customer needs in
different countries.
There are several international distribution strategies that companies can consider:
1. Exporting: This strategy involves producing goods or services in the home country and then
exporting them to foreign markets. It can be done directly by the company or through
intermediaries such as distributors or agents. Exporting is often the initial entry mode for
companies expanding internationally, as it allows them to test the market and minimize
investment risks.
2. Licensing and Franchising: Companies can license their intellectual property, technology, or
brand to foreign partners who produce and distribute the products or services in the target
market. Franchising is a similar strategy where companies grant the right to operate a
business using their brand and business model. Licensing and franchising are suitable when
local partners have a better understanding of the market and distribution networks.
3. Joint Ventures and Strategic Alliances: Companies can form partnerships with local firms in
foreign markets to establish joint ventures or strategic alliances. These partnerships allow for
shared resources, knowledge, and distribution networks, enabling companies to leverage
local expertise and overcome market entry barriers.
4. Direct Investment: Companies can establish their own subsidiaries, branches, or production
facilities in foreign markets through foreign direct investment (FDI). This strategy provides
greater control over operations and distribution channels but requires significant investment
and entails higher risks.
Considering the nature of XYZ Interest Free Bank’s financial services, a combination of exporting and
strategic alliances would be an appropriate distribution strategy.
Exporting would allow the bank to leverage its existing capabilities and expertise in providing
interest-free financial services. It could start by exporting financial products and services to
neighboring countries, leveraging existing distribution channels and networks. This strategy would
enable the bank to test the market demand, establish brand presence, and gain insights into the
specific needs and preferences of customers in each target country.
Simultaneously, forming strategic alliances with local financial institutions or partners in the target
markets would provide the bank with access to their existing distribution networks and customer
base. These alliances would leverage the local partners’ knowledge of the regulatory environment,
cultural nuances, and customer behavior, facilitating a smoother entry into the market. Additionally,
strategic alliances can help overcome administrative and cultural distance, as local partners can
navigate the complexities of the host country’s business practices and regulations.
By combining exporting and strategic alliances, XYZ Interest Free Bank can establish a presence in the
target markets while minimizing risks and capital investment. This approach allows the bank to
gradually expand its operations, build relationships with local partners, and adapt its products and
services to meet the specific needs of customers in each country.
It is important for the bank to conduct thorough due diligence and select reliable and reputable
partners for strategic alliances. Building strong relationships based on trust, mutual benefits, and
shared values will be crucial for the success of the distribution strategy.
In conclusion, a distribution strategy that combines exporting and strategic alliances would be
appropriate for XYZ Interest Free Bank. This approach allows the bank to leverage its expertise
through exporting while benefiting from the local knowledge and distribution networks of strategic
partners.