Question one: Selection of Countries for Global Business and Strategies for Participation
a) What are the most important criteria for determining what are, and what are not, globally strategic markets? Please describe these criteria in detail and provide some relevant examples.
The success of today’s global business environment requires the firm to possess the capability of communicating the necessary knowledge, and negotiating with other firms around the world. The network of social relationships enhances the understanding of global strategic marketing among related firms based on economic and market performance analysis. Most organizations fail to accomplish the global marketing strategies after few years. A lot of researches have been done to determine the main causes of failure for these firms in relation to strategic management, and the available business and organization theories. While designing a global marketing strategy, managers should keen enough to avoid pitfalls that arise while implementing global marketing plans. These failures result from insufficient information on global strategic markets. The failure may also be as a result of business owners laying very little emphasize on coming up with alternative strategies, in case the first one fails. Moreover, external factors contribute a lot to strategy failure due to unrealistic strategic goals (Kotabe and Helsen 2007).
In determining global strategic markets design, the following criterion is followed. To start with the designers should know the firm’s specific factors. These assist determining the strategic importance of international business. For example, Nike Inc has developed into many international countries since the management understands the benefits of investing in foreign countries. Secondly the factors make the firm aware of the diversity of the products they offer to the market. Offering a variety of products increases the chances of winning the competition in the global market. Diversification enables a firm to counter any losses in case one line of production fails, they can always adapt the second option. Thirdly, the firm’s specific factor enables investors determine the company’s heritage. As an investor, it is importance to understand the nature of the company one is investing. Developing global market strategies in the present environment has forced many firms look for investors from different countries in order to familiarize with the local people. Finally, this criterion assists in determining the quality of the company managerial skills (Tomas and George, 2012). Poor management leads to failures in the global marketing plan. Firms should select experienced managers who have the necessary knowledge on how to handle international business issues.
In addition, the organization aiming at entering the global market should consider the environmental factors. The present day’s business environment is composed of many competitors dealing with the same line of production. The global strategic market criterion addresses the issue of competition very keenly. Global strategic analysis involves stiff competition among industries extending across national boundaries. Competition takes place many different ways. The geographic scope of the relevant organizations is one of the factors that promote competition. Most industries use the Porter’s five forces theory to determine their suitability of investing in a certain geographic location. The rate of environmental change requires global industries to change with together with changing business operations. According to Tomas and George (2012), firms that adopt global marketing strategies should be prepared to face many challenges especially because of the rapidly changing business environment. Business people always find themselves lagging behind due to lack of current information on the global markets.
b) What are the specific benefits to the firm of participating in globally strategic markets? Please describe these benefits.
Proper implementation of global strategic marketing plan enables organizations successfully deal with the threats and opportunities found in the global marketing environment. Globally strategic markets enhance cooperation among involved firms. Cooperation between global firms enables the firms to have information on the global market situations through passing of information from one company to the other. The second benefit of globally strategic marketing is that it creates superior understanding of corporate priorities. An organization that practices good corporate social responsibilities ends up attracting more customers to buy its products. Corporate priorities assist in creating customer value hence, building good buyer-customer relationship. On the other hand, global strategic markets make the firm more aware of global problems. Global business operations are faced with many problems that can lead to failure of a business if it does not recognize them. Global strategic marketing enables an organization plan for future risks that might arise, and cater for them accordingly. The organization develops a competitive advantage among others since it has risk mitigation actions (Tomas and George, 2012).
A firm doing global business operations enjoys micro level benefits since the resources are allocated in a manner that the firm takes advantage of opportunities outside the domestic market. Global investment puts an organization in a position to enjoy the international benefits through exploring new market conditions. In relation to the above, the firm builds a strong competitive advantage that enables it deal with the environmental and economic factors. Global strategy market has the ability of expanding organization operations on the domestic market. Firms that have branches globally gather information on the current technology, and new marketing strategies, which they take to their home countries encouraging nation’s development. Moreover, the firm develops more confidence towards operating at a high strategic level in the global market environment (Tomas and George, 2012).
c) International joint ventures represent a special case in the global market participation. Why are they considered a special case? What factors must managers consider when setting up international joint ventures, within the framework of global strategy?
There has been an increase in the frequency and importance of International Joint ventures in global strategy. Many nations fail to come into an agreement concerning International Joint Ventures due to their performance and development of alternative performance indicators in the new market. These disagreements make the issue of International Joint Venture a special case in the global strategy. A joint venture composes of two or more major firms who are involved in decision making concerning a joint owned entity (Geringer and Hebert, 1991). In addition, the companies should possess better ways of securing access to foreign markets. The international joint ventures represent economic cooperation between firms as they participate in the global market environment. International joint venture represents a special case in the global market since the involved firms organize their activities in such a manner that they share both profits and losses achieved. The case provides an important strategy for joint ventures to participate in the emerging markets. The host country in the emerging market develops rules that ensure all the associated firms export their outputs to the country. Export growth closely relates to higher economic development of the emerging markets. Moreover, special cases concerning international joint ventures came along considering the host country should dictate business rules.
Question two: Benefits and Drawbacks of Adaptation
a) From Zebra’s standpoint, what are the main advantage(s) of selling a standardized product in Russia?
The Russian standards are different from those of United States. In selling standardized products, the company develops customer needs for uniform products that are adapted to the country standards. Secondly, standardization increases economies of scale, enabling Zebra benefit from large Russian market. This leads to reduced cost as the company produces many products at once. In addition, producing standardized products will enhance customer preference in Russia, encouraging more global customers and increasing market segment (Marketingteacher.com, 2012). Moreover, product standardization has a great impact on the global competitive strategy. Zebra’s competition in Russia’s electronic market will have a great impact to the Russia market since Zebra Corporation is more technologically advance. Zebra laser printers have strong technological background, which creates superiority among Russia products. Zebra also has an advantage of success in the global market since their products will be used not only in Russia, but also globally (Mitchell, 2008).
b) What are the main advantage(s) of adapting the product for selling in Russia?
United States is believed to produce technologically advanced products. Zebra Corporation has the capability of selling most of its products in Russia. Selling adapted products to Russia ensures that people travelling to the country from other nations can easily utilize these products. This creates a positive consumer perception towards Zebra Corporation electronic products increasing sales projections. Another advantage of adapting the products for selling in Russia is the reduced cost of production. After establishing the business in Russia Zebra Corporation will be in a position to make large quantities of the same product that are well adapted to the country standards. According to Marketingteacher.com (2012), the cost reduction gives the company economies of scale due to benefits of producing products in large quantities. Finally, selling products in Russia creates an opportunity for Zebra Corporation to put up a factory in the country, which reduces the cost of importation of finished products.
c) What are the factors that typically affect product adaptation decisions?
Most international firms trading in the global markets never make changes on their products but design them according to the new countries standards. Even if some products fail to satisfy customers the firm adapts the product to fit the consumer demands. Product adaptation adds quality to the product through increasing its revenue. Increased revenues are because of increased sales since the product fully satisfies customers. In making decisions concerning the product, the price, promotion and distribution, the knowledge of the marketing mix is necessary. Product adaptation decision is affected by the marketing plan adopted by an organization. Factors affecting product adaptation differ in different nations, and also on the type of product that a firm offers (Leonidas, 1996). Developing an international product adaptation strategy requires a lot of knowledge on global marketing and its essentials. When an organization decides to expand its operations in another country, many challenges arise that requires a perfect entry marketing strategy as they adapt to the new standards. These challenges occur in; the marketing sector, competition, and adhering to the new country’s business laws. While planning an international model, most investors target the developing countries since they have a very good opportunity for business advancement. In most organizations product branding is committed to the top management to allow them focus more on the international market.
On the other hand, investors will always look a risk free business as determined by competitors’ feedback regarding the new region’s sales projections, suppliers, and distributors. Target market is the first factor to consider. Product adaptation process requires knowledge o marketing trends regarding the consumer’s moods, opinions, and tastes. Understanding the target market requires business people to make use of feedback from the customers (Balle, 2012). Product adaptation is affected the action of competitors. Zebra Corporation should keep an eye on companies producing similar products while evaluating their own products. Product offering introduced by competitors affects the product adaptation of the company in question. For instance, when Zebra produces printers that are adapted to Russia’s environment, they require patenting their brands to avoid competitors from copying their models. According to Prahalad, most multinational companies target customers at the upper end of the pyramid since they are capable of adapting to new products easily (2009). Most customers from Russia prefer products from foreign countries, especially United States since they have grown in technology and have long-lasting products. In the global market, adapting product to fit to the country standards enables the new entrants develop good reputation about their company.
d) Zebra management is concerned that its pricing might be too high, given the lower income level of typical Russian consumers. What steps can Zebra take to help reduce the pricing on its laser printers for sale in Russia?
The market structure adopted by an organization acts as an element of undertaking need analysis of the market share. In this, the market structure has to segment the potential market of the organization products for effective analysis of the needs, and formulation of measures that need adoption by the company. Pricing is one of the most challenging issues that affect most businesses while entering a new market place. In reducing the prices for the printers, Zebra should take the following steps. First, the company should set up a factory in Russia in order to reduce the cost of production. Since the raw materials are available in United States, the company can import them in large quantity and develop as many printers as possible. Secondly, Zebra could develop alternative low priced printers and offer them at affordable prices to the Russians. Development of a correct pricing strategy is essential for every business. Pricing strategy helps businesses to concentrate and utilize the available resources and opportunities to realize profits and become competitive in the market (Armstrong and Kotler, 2008).
Another step that Zebra should take is adapting outsourcing computer experts in Russia instead of having full-time workers. Outsourcing workers will reduce the cost of production, which enables the company offer its products at reduced prices and still make profits. This strategy involves hiring part-time workers, or temporary workers at a cheaper cost. On the issue of reducing the workforce the company could adopt new automated methods in its factories. The strategy involves laying-off some of its employees and replacing them with machines. This reduces the cost of operations since a machine can do more work as compared to a human being, and also produce quality work with more precision. In addition, the company can make use of internet to make advertisements. There are very many social interaction sites that have cropped up, which the company could use to advertise its products in Russia. Internet marketing is cheap compared to physical advertisement methods (Vij, 2011).
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