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Competing in Global Markets Group 3 Vijay Madanu – 17 Ankur Rathi – 37 Vishal Roge – 38 Sachin Shah – 42 Deepak Singh – 47 Nikhil Thadani - 52.

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Presentation on theme: "Competing in Global Markets Group 3 Vijay Madanu – 17 Ankur Rathi – 37 Vishal Roge – 38 Sachin Shah – 42 Deepak Singh – 47 Nikhil Thadani - 52."— Presentation transcript:

1 Competing in Global Markets Group 3 Vijay Madanu – 17 Ankur Rathi – 37 Vishal Roge – 38 Sachin Shah – 42 Deepak Singh – 47 Nikhil Thadani - 52

2 Structure Globalization Factors - Overview Global Strategic Models – Porter & Yip Blue Ocean and Red Ocean Strategy Case Analysis

3 Forces driving global integration Globalization of Economies – Emerging markets Fierce local competition Syndication of Technology – Manufacturing Efficiency Trade pacts and bilateral ties between economies Conducive business / monetary policies promoting international trade Growing literacy rate Rise in Per capita income

4 Industry Globalization Drivers Market Drivers – Common Customer Needs – Global Customers & Channels – Marketing Mix Cost Drivers – Global Economies of Scale & Scope – Steep Learning & Experience Curve Effects – Favorable Logistics – Shortening PLC, Rising R&D & Development Costs – Fast Changing Technology

5 Industry Globalization Drivers Government Drivers – Favorable Trade Policies – Compatible Technical Standards – Common Marketing Regulations – Government as a Customer Competitive Drivers – Presence of Global Competitors – Presence of Strong Local Competitors

6 Issues Faced… Government intervention Infrastructure bottlenecks Legal environment Financial Regulations Civil Disturbances Environmental Issues

7 Advantages of going Global Scalability – production, sourcing, R&D Learning from different markets Marketing and Distribution Investor / Consumer Confidence

8 Challenge Converting global advantage in to local advantage Enriching experience from local markets to global scale

9 Essentials of competing in global markets Effectively managing change and transition Cultural diversity Design flexible organizational structures Compliances – Environment, Safety

10 Key Elements for International Competition Competitive Advantage – The set of unique features of a company and its products that are perceived by the target market as significant and superior to the competition. Sustainable Competitive Advantage – An advantage that cannot be copied by the competition

11 International Strategy An International Strategy is a strategy through which the firm sells its goods or services outside its domestic market. Reasons for implementing an international strategy – International markets yield potential new opportunities – To extend a product life cycle – To secure needed resources

12 Opportunities and Outcomes of International Strategy Increased Market Size Return on Investment Economies of Scale and Learning Advantage in Location Increased Market Size Return on Investment Economies of Scale and Learning Advantage in Location International Business –level Strategy Multi-domestic Strategy Global Strategy Transnational Strategy International Business –level Strategy Multi-domestic Strategy Global Strategy Transnational Strategy Exporting Licensing Strategic Alliances Acquisitions Establishment of a new subsidary Exporting Licensing Strategic Alliances Acquisitions Establishment of a new subsidary Management Problems and Risk Better Performance Innovation Better Performance Innovation Management Problems and Risk Identify International Opportunities Strategic Competitivene ss Outcomes Explore Resources & Capabilities Use of Core Competenc e Modes of Entry

13 International Strategies International Business-Level Strategy – Global cost leadership – Global differentiation – Global segmentation International Corporate-Level Strategy – Global strategy – Multi-domestic strategy – Transnational strategy

14 International Business-Level Strategy Global cost leadership – focuses on being the lowest cost producer of a product globally – Takes advantage of global economies of scale & high volume sales world-wide – Eg: Walmart Global differentiation – Create a superior product or change customer perception of the product in order to raise price on a global scale – Often the basis of this strategy is a strong brand name – Eg: Apple Global segmentation – Global version of a focused strategy – Can be either be global cost leadership or global differentiation – Targets a single segment on a worldwide basis – Eg. Zara

15 Multi domestic Strategy Multi domestic Strategy Transnational Strategy Global Strategy LOW HIGH LOW HIGH Need for Global integration Need for Local Responsiveness

16 International Corporate-Level Strategy Global strategy – Firm offers standardized products across country markets, with competitive strategy being dictated by the head office – Emphasizes economies of scale – Less responsive to local markets – Eg Coke, Pepsi Multi-domestic strategy – Strategic and operating decisions are decentralized to the strategic business unit in each country – Maximizes local responsiveness – Eg. Unilever, P&G Transnational strategy – Firm seeks to achieve both global efficiency and local responsiveness – Eg. Dell

17 Modes of Entry Types of EntryCharacteristics ExportingHigh cost, low control LicensingLow cost, low risk, little control, low returns Strategic alliances Shared costs, shared resources, shared risks, problems of integration Acquisition Quick access to new market, high cost, complex negotiations, problems of merging with domestic operations Wholly owned subsidiary Complex, often costly, time consuming, high risk, maximum control, potential above-average returns

18 Strategic Competitiveness Outcomes International Diversification and returns – Greater economies of scale and learning along with greater innovation, help produce above- average returns. International Diversification and innovation – Provides larger market to gain more and faster returns from investments in innovation – May generate resources necessary to sustain a large-scale R&D program

19 Risks in International Environment Political risk – Domestic instability – Foreign conflict – Protectionism: Tariff, Quota, Subsidy, Cartel – Corruption: Bribery, Extortion, Grease payments Economic risk

20 Porter and Multidomesticity According to Porter, a company is: – Multidomestic if competition in each nation is independent – Global if the competition is global

21 Basis of Global Strategies: 2 Models Porter’s Yip’s

22 Porter’s Global Generic Strategies Protected markets National responsiveness Global cost leadership Global differentiation Global segmentation

23 Protected Markets Focusing on competing in countries where that particular government protects or favors the business

24 National Responsiveness Focuses on adapting strategy to each local market

25 Red and Blue Ocean Strategy

26 Create uncontested market space Make the competition irrelevant Create and capture demand Break the value – cost trade off Align the whole system of firms activities with its strategic choice of differentiation and cost Blue Ocean Strategy Complete in existing market space Beat the competition Exploit existing demand Make the value-cost trade off Align the whole system of firms activities with its strategic choice of differentiation or cost Red Ocean Strategy

27 Which factors industry takes for granted that should be eliminated Eliminate Which factors should be reduced well below the industry’s standard Reduce Which factors should be raised well above the industry standard Raise Which factors should be created that the industry has never offered Create Four Action Framework

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29 6 principles of Blue Ocean Strategy

30 Case Analysis MTV v/s Channel V

31 Case Overview Entered in India via STAR’s satellite feed in 1991 Rupert Murdoch acquired STAR in 1993 and MTV parted ways over some commercial disagreements. This led to launch of Channel V MTV launched again in 1995 – focused on youth and common brand image Stiff competition on distribution figures While MTV had a upper hand in attracting advertisers and revenue, Channel V was better off recovering cost by low and smart investment

32 Launch Approach MTV wasn’t adopting product to local tastes and requirements – Global approach Channel V on other hand went for localization with artists and programming – VJ’s – Local Artists

33 Strategic Approach MTV – Multidomestic – Localized content but certain common values that projected the brand in a certain form for consumers ‘MTV Generation’ – Positioning – Music Channel – Global Network Channel V - National Responsiveness Strategy – Total localization, positioned themselves differently in each market – Changed Positioning in 1999 – Positioned as a youth channel – Regional network

34 India MTV – Focused on roadshows and Dance parties – Music entertainment – Mass base Channel V – Operational liberty (National Responsive Strategy) – International Content and music – Focused on classes – Coke V Live Concert, Music awards with local, national and international artists – 10 concerts in two years (97-98) – Long term advertising deals

35 China MTV – Televised Award ceremonies were very important – MTV announced Music Honours in association with CCTV – days before Channel V planned event – Lack of procedural clearances delayed the project by 3 months Channel V – Successful music awards even that got 500 million viewers across Asia / 3 million votes across 20 categories

36 Strategy – reach and distribution MTV – Concentrated on Syndication / Fixed slot and claimed more reach amongst the TG Channel V – Focused on 24 hour relay of channel through satellite and cable – Illegal satellite and cable made it difficult for ad sales

37 Going beyond With advertising and reach being limited it was necessary for both the channels to move out and compete beyond television audiences – Syndication – Licensing – Merchandising – Royalties

38 Licensing and Merchandising MTV - Global – Globally recognized brand and logo helped in creating tailor made music eg. Unplugged series, MTV Alternate Nation etc – Branded Merchandise like clothing, books, backpacks etc – MTV branded Pagers – Different pricing for different markets – eg. Philippines and Singapore – Scores heavily on brand perception over Channel V Channel V – India – Albums & T-shirts – more for promotion – Kazakhstan – Deal with ALMA TV for beaming it to homes – Poor logo – Lack of brand equity as compared to MTV

39 Others Better operations to reduce over head costs – Channel V overhauled their system to Digital and increased efficiency MTV launched website with Tricast Ltd – Allowing video, audio downloads and news updates – Chinese Version – Plans to monetize inventory – Sell merchandise – Collect more TG data for sales support – 4 times the traffic of Channel V – Live Webcast – Billboard Asian Music conference


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