1. International Business Islamia University of Bahawalpur Delivered by: Tasawar Javed

2. This talk includes:  Development of Global program  Implementing Global program International Business

3. Developing Global Program 4 steps  Product offering  Marketing Approach  Location of Value Added Activities  Competitive Moves Stage 3 Development of Global Program

4. Product Offering Product standardization may result in significant cost saving

5. 1. Product offering Standardize manufacturing process to reduce costs and increases globalization of company Differentiate at end of production to suit different segment preferences (handsaw) Example: whirlpool use common platforms for US and European markets to reduce costs by sharing technology and suppliers At the end stage they will add components which will differentiate between the “top of the line” and the “no Frills” versions Product Offering

6. Uniformity is sought especially in elements that are strategic (positioning) in nature, whereas care is taken to localize necessary tactical elements (distribution) Marketing Approach Glocalization

7. 2. Marketing Approach Glocalization: is when marketeers balance the need for production uniformity against the needs of customers in different regions In the way a globalised manufacturer localises the selling of his product Example: Unilever use the same marketing theme and symbol (teddy bear) when advertising fabric softener throughout the world. But in different regions the bear is given a different name and there are different bottle sizes Stage 3: Development of Global Program

8. Cost Reduction Location of Value-Added Activities Pool Production Concentrate Activities Exploit Factor Costs

9. 3. Location of Value-Added Activities 1. the location R&D is crucial to globalization. Ensure R&D is located close to factory floor. Ensure R&D centres have joint projects and are in real- time contact This interlinks each R&D centre and prevents doubling up 2. have one specialist unit for after sale customer care to cover a whole number of countries rather than one in each country (Sony) This can be done to improved transportation links Stage 3: Development of Global Program

10. Global companies may have to respond to competitive moves in a variety of markets Cross-subsidization may offer competitive advantage Competitive Moves

11. 4. Competitive Moves Competition = war/game of strategy Be ready to react to attacks in any region and counterattack – may be in different region Example:Fuji attacked Kodak’s market share in US, Kodak reacted by attacking the Japanese market Stage 3: Development of Global Program

12. Cross-Subsidisation = using resources accumulated in one region to fight a competitive battle in another Mobile Phone industry – the companies that will succeed in the future are those that can provide low cost phones in emerging economies while also offering internet based devices elsewhere eg Vodafone? Stage 3: Development of Global Program

13. Successful Companies strive to balance local and global concerns  Too much local production may reduce import positioning  Too little planning involvement by the country organization may lead to NIH (not invested here Syndrome) Implementing Global Programs

14. 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 Example: Tesco Ireland Avoiding the Not-Invested-Here Syndrome

15. Stage 4: Implementing Global Program True globalization occurs when the groups within an MNC co-ordinate their activities directly Example: Coca-Cola in 1993 re-entered the Indian market advertising Coca-Cola as it does in the US Europe etc It begun to lose market position to Pepsi, realised its mistake and changed focus to a local brand Thus refocusing advertising on a brand more relevant to the local Indian consumer

16. Localizing Global Moves The role of headquarters staff should be one of coordination, and leveraging the resources of the corporation Executing Global account management programs builds relationship with customers and allow for development of internal systems & interaction Decision-making in global companies support the goal of treating the world as a single market

17. SBU In summary the challenges for Global prorammes are: 1. Insufficient research 2. Over standardization 3. Inflexibility in planning and implementation 4. Not-invested-here syndrome (NIH) 5. Glocalization issues “think globally, act Locally”

18. Internationalization, planning & developing Key management challenges of international business 1. Import duties/tariffs (+) sale price and (-) sales 2. Requirement for natural resources, either import or set up factory beside them 3. Competition pushed you to (+) efficiency and (-) costs of production. Move production to a country were the four factors of production are cheaper. These factors are Land, Capital and resources 4. Transfer capital and investment in FDI occurs to take advantage of another economy’s competitive advantage

19. Global Market Entry Strategies Typical entry strategies include:  Exporting & importing  Licensing  Franchising  Expansion through alliances  Joint venture  Foreign Direct Investment

20. Internationalization, planning & developing Decision – making tree 5 steps to FDI Step 1 what market? Domestic v Foreign Step 2 produce where? Export or FDI Step 3 who produces? License v Own Step 4 with whom? JV v Wholly owned Step 5 what to invest in? existing v Greenfield investment

21. Thank you!!! Q&A