2Learning ObjectivesOutline the process of strategic planning in the context of the global marketplace.Examine both the external and internal factors that determine the conditions for development of strategy and resource allocation.Illustrate how best to utilize the environmental conditions within the competitive challenges and resources of the firm to develop effective programs.Suggest how to achieve a balance between local and regional/global priorities and concerns in the implementation of strategy.
3Strategic PlanningGlobalizationThe Strategic Planning Process
4GlobalizationGlobalization reflects a business orientation based on the belief that the world is becoming more homogeneous and that distinctions between national markets are not only fading but, for some products, will eventually disappear.
5Globalization Drivers Both internal and external factors will create favorable conditions for development of strategy and resource allocation on a global basis.These factors can be divided into:Market FactorsCost FactorsEnvironmental FactorsCompetitive Factors
6Market Factors The world customer gains new meaning. Developed infrastructures lead to attractive markets for other products.Similarities in demand conditions facilitates product design.Channels of distribution are becoming more global.Technology changes the landscape of markets.
7Cost Factors Two powerful cost-related globalization drivers. Cost inefficienciesDuplication of effort
8Environmental Factors Removal of physical, fiscal, and technical barriers to further facilitate globalization of markets.Rapid technological evolution contributes to globalization efforts.Smaller bureaucracies of mininationals facilitates new product development and allows for opportunities to seize new markets.
9Competitive FactorsCompanies may have to be the first to do something new, or to preempt competitors’ moves.Market presence may be necessary.
10The Strategic Planning Process Formal strategic planning contributes to:Non-financialObjectivesFinancial Performance
11The Strategic Planning Process Involves: Adjusting the core strategy.Formulating global marketing strategy.Developing global programs.Implementing global programs.
12Core Strategy Assessing and Adjusting: Forces determining business success are common todifferent countries.Companies mustassess their ownreadiness fornecessarymovesNecessary Participants:Executives from marketing,production, finance, logisticsand procurement.
13Formulating Global Strategy The choices:Cost LeadershipDifferentiationFocus
14Country-Market Choice Three factors should determine country selection:The stand-alone attractiveness of a market.Global strategic importance.Possible synergies
15SegmentationThe recognition that groups within markets differ sufficiently to warrant individual approaches.Allows global companies to take advantage of the benefits of standardization.Involves looking at markets on a global or regional basis.
16Developing Global Programs Decisions involved in developing a global program.The degree of standardization in theproduct offering.The marketing program beyond theproduct variable.Location and extent of value-addingactivities.Competitive moves to be made.
17Product OfferingProduct standardization may result in significant cost savings.
18Marketing Approach Glocalization Uniformity is sought especially in elements that are strategic in nature, whereas care is taken to localize necessary tactical elements.Glocalization
19Location of Value-Added Activities Cost Reduction:Pool ProductionExploit Factor CostsConcentrate Activities
20Competitive MovesGlobal companies may have to respond to competitive moves a variety of markets.Cross-subsidization may offer competitive advantage.
21Implementing Global Programs Successful companies strive to balance local and global concerns.Too much local production may reduceimport positioning.Too little planning involvement by thecountry organization may lead to NIH.
22Avoiding The Not-Invented-Here Syndrome Ensure that local managers participate in the development of strategies and programs.Encourage local managers to generate ideas.Maintain local and global product portfolios.Allow local managers to control budget.
23Localizing Global Moves The role of headquarters staff should be one of coordination, and leveraging the resources of the corporation.Globalization calls for the centralization of decision-making authority beyond that of the multidomestic approach.Executing global account management programs builds relationships with customers and allows for development of internal systems and interaction.Decision-making in global companies supports the goal of treating the world as a single market.