1. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 6 Strategic Planning

2. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Global Marketing Globalization reflects a business orientation which believes that: – –

3. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Exhibit 6.1: Global Marketing Evolution

4. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Global Marketing Globalization drivers –Market factors – –Cost factors – –Environmental factors – –Competitive factors –

5. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Exhibit 6.3 – The Global Landscape by Industry and Market

6. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Strategic Planning Process Formal strategic planning contributes to both financial performance as well as non financial objectives such as: – – – –

7. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Strategic Planning Process Three broad dimensions to be kept in mind while undertaking formal strategic planning: – –The costs in terms of management time and process realignment. –

8. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Exhibit 6.4 - Global Strategy Formulation

9. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Strategic Planning Process Understanding and adjusting the core strategy – –The strategic business unit (SBU) represents groups organized around product market similarities based on: –Requires the participation of executives from different functions.

10. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Strategic Planning Process Market and competitive analysis –Help balance risks, resource requirements, competitive economies of scale, and profitability to gain stronger long-term positions. – Internal analysis –

11. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Strategic Planning Process Formulating a global marketing strategy – – –

12. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Exhibit 6.5 - Competitive Strategies

13. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Strategic Planning Process Country-market choice –A market expansion policy will determine the allocation of resources among various markets; basic alternatives being concentration and diversification. –Factors that determine country market selection:

14. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Exhibit 6.7 - Factors Affecting the Choice between Concentration and Diversification Strategies

15. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Strategic Planning Process Segmentation – –Allows global marketers to take advantage of the benefits of standardization while addressing the unique needs and expectations of a specific target group.

16. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Exhibit 6.8 - Bases for Global Market Segmentation Environmental Variables Environmental Variables Marketing Management Variables Marketing Management Variables Geographic Variables Geographic Variables Political Variables Political Variables Economic Variables Economic Variables Cultural Variables Cultural Variables Promotion Variables Promotion Variables Product Variables Product Variables Price Variables Price Variables Distribution Variables Distribution Variables Bases for International Market Segmentation

17. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Global marketing program development - Marketing related decisions will have to be made in four areas: –The degree of standardization in the product offering. –Marketing approach - –Location and extent of value-adding activities. –Competitive moves - The Strategic Planning Process

18. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Strategic Planning Process Challenges of global marketing –Insufficient research and the tendency to over- standardize. – –Local resistance in the form of not-invented-here syndrome (NIH), which occurs when country organizations are not part of the planning process, or if adoption is forced on them by headquarters.

19. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Strategic Planning Process How to avoid the NIH syndrome –Ensure that local managers participate in the development of global brand marketing strategies. – –Maintain a product portfolio that includes local as well as regional and global brands. –

20. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Strategic Planning Process Localizing global marketing –Management processes Globalization enhances the flow of information, leading to idea exchange and strengthening of organizational values. Coordinate and leverage resources of the corporation. Minimize the influence of the NIH syndrome by using motivational policies.

21. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Strategic Planning Process Localizing global marketing –Organization structures The matrix structure is considered more effective in today’s global marketplace.

22. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Strategic Planning Process Localizing global marketing –Corporate culture The management development system has to be transparent; non-national executives should have an equal chance for the fast track to top management.

23. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Local Company in the Global Environment The degree and strength of globalization in an industry will determine the pressure that the local marketer will be under. Multiple strategies are available to local marketers when global markets and marketers challenge them.

24. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Exhibit 6.10 - Competitive Strategies for Local Companies

25. © 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Local Company in the Global Environment The following six-part strategy for success has been proposed: –Create customized products and services. – –Utilize the latest technology for advantage. – –Exploit low-cost labor. –