Chapter 8

GLOBAL MARKETING
STRATEGIES

Kotabe & Helsen's Global Marketing Management, Third Edition, 2004 Chapter 8
 Chapter Overview
2

1. Information Technology and Global

Competition
2. Global Strategy
3. Global Marketing Strategy
4. Regionalization of Global Marketing Strategy
5. Competitive Analysis

Chapter 8
 Introduction
3

On a political map, country borders are clear as

ever. But on a competitive map, financial, trading,
and industrial activities across national boundaries
have rendered those political borders increasingly
irrelevant.
Not only firms that compete internationally but
also those whose primary market is considered
domestic will be affected by competition from
around the world.

Chapter 8
 1. Information Technology and
Global Competition
4

Today, we are observing the emergence of a gross

information product, and it dwarfs the gross
domestic product.
Electronic Commerce (E-Commerce)
Real-Time Management
Online Communications
“Internet” Organization
Faster Product Diffusion

Chapter 8
 1. Information Technology and
Global Competition (contd.)
5

Global Citizenship

Chapter 8
 2. Global Strategy
6

Global Industry:
 Those industries where a firm’s competitive position in
one country is affected by its position in other countries.
 The first question that faces managers is the extent of
globalization of their industry.
 Every industry has global or potentially global aspects.

Chapter 8
 2. Global Strategy (contd.)
7

Industry Globalization Drivers (Yip, G. S., Total Global Strategy, Prentice Hall, 1992).

Market Drivers

Cost Industry Government

Drivers Globalization Drivers
Potential

Competitive Drivers

Chapter 8
 2. Global Strategy (contd.)
8

Industry Globalization Drivers (see Exhibit 8-1):

 Market Globalization Drivers
1. Common customer needs
2. Global customer and channels
3. Transferable marketing
4. Lead countries
 Cost Globalization Drivers
1. Global economies of scale and scope
2. Steep experience curve

Chapter 8
 2. Global Strategy (contd.)
9

3. Global sourcing efficiencies

4. Favorable logistics
5. Difference in country costs
6. High product development costs
7. Fast-changing technology
 Government Globalization Drivers
1. Favorable trade policies

Chapter 8
 2. Global Strategy (contd.)
10

2. Compatible technical standards

3. Common Market Regulations
4. Government-owned Competitors
5. Government-owned Customers
 Competitive Globalization Drivers
1. High exports and imports
2. Competitors from different continents
and countries
3. Interdependent countries
4. Globalized competitors

Chapter 8
 2. Global Strategy (contd.)
11

Competitive Structure
 Cost leadership
 Product differentiation
 Niche strategy
 Nature of Competitive Industry Structure (see Exhibit 8-2):
»Industry competitors
»Potential entrants

Chapter 8
 2. Global Strategy (contd.)
12

»Bargaining power of suppliers

»Bargaining power of buyers
»Threats of substitute products or services
Hypercompetition
 Creative destruction
 Cost and quality
 Timing and know-how
 Strongholds

Chapter 8
 2. Global Strategy (contd.)
14

 Financial resources
Interdependency:
 Interdependency of modern companies
 Example: Global computer industry
 Governments also play a larger role, affecting parts of the
firm’s strategy.

Chapter 8
 3. Global Marketing Strategy
15
Benefits of Global Marketing:
 Cost Reduction
 Improved Products and Program Effectiveness
 Enhanced Customer Preference
 Increased Competitive Advantage
Limits to Global Marketing:
 Standardization vs. adaptation issues
 Globalization vs. localization
 Global integration vs. local responsiveness
 Scale vs. sensitivity

Chapter 8
 4. Regionalization of Global
Marketing Strategy
16

Regional strategies are the cross-subsidization of

market share battles in pursuit of regional
production, branding, and distribution advantages.
 Issues in regionalization of global marketing strategy:
 Cross-Subsidization of Markets
 Identification of Weak Markets
 Use of Lead Market Concept
 Marketing Strategies for Emerging Markets

Chapter 8
 5. Competitive Analysis
17
SWOT (Strengths, Weaknesses,
Opportunities, and Threats) Analysis (see
Exhibit 8-6)
 A SWOT analysis divides the information into two main
categories: internal and external factors.
 Based on SWOT analysis, marketing executives can
construct alternative strategies.
 The aim of any SWOT analysis should be to isolate the
key issues that will be important to the future of the firm
and that will be addressed by subsequent marketing
strategy.

Chapter 8
 Q&A

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