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

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competing in global markets

Competing in Global Markets

Group 3

Vijay Madanu – 17

Ankur Rathi – 37

VishalRoge – 38

Sachin Shah – 42

Deepak Singh – 47

Nikhil Thadani - 52

structure
Structure
  • Globalization Factors - Overview
  • Global Strategic Models – Porter & Yip
  • Blue Ocean and Red Ocean Strategy
  • Case Analysis
forces driving global integration
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
industry globalization drivers
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

industry globalization drivers1
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

issues faced
Issues Faced…
  • Government intervention
  • Infrastructure bottlenecks
  • Legal environment
  • Financial Regulations
  • Civil Disturbances
  • Environmental Issues
advantages of going global
Advantages of going Global
  • Scalability – production, sourcing, R&D
  • Learning from different markets
  • Marketing and Distribution
  • Investor / Consumer Confidence
challenge
Challenge
  • Converting global advantage in to local advantage
  • Enriching experience from local markets to global scale
essentials of competing in global markets
Essentials of competing in global markets
  • Effectively managing change and transition
  • Cultural diversity
  • Design flexible organizational structures
  • Compliances – Environment, Safety
key elements for international competition
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
international strategy
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
opportunities and outcomes of international strategy
Opportunities and Outcomes of International Strategy

Identify International Opportunities

Explore Resources & Capabilities

Use of Core Competence

Strategic Competitiveness Outcomes

Modes of Entry

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

Exporting

Licensing

Strategic Alliances

Acquisitions

Establishment of a new subsidary

Management Problems and Risk

Better Performance

Innovation

Management Problems and Risk

international strategies
International Strategies
  • International Business-Level Strategy
    • Global cost leadership
    • Global differentiation
    • Global segmentation
  • International Corporate-Level Strategy
    • Global strategy
    • Multi-domestic strategy
    • Transnational strategy
international business level strategy
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
slide15

Global Strategy

Transnational Strategy

HIGH

Need for Global integration

Multi

domestic Strategy

LOW

LOW

HIGH

Need for Local Responsiveness

international corporate level strategy
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
    • EgCoke, 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
strategic competitiveness outcomes
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
risks in international environment
Risks in International Environment
  • Political risk
    • Domestic instability
    • Foreign conflict
    • Protectionism: Tariff, Quota, Subsidy, Cartel
    • Corruption: Bribery, Extortion, Grease payments
  • Economic risk
porter and multidomesticity
Porter and Multidomesticity

According to Porter, a company is:

Multidomestic if competition in each nation is independent

Global if the competition is global

porter s global generic strategies
Porter’s Global Generic Strategies

Protected markets

National responsiveness

Global cost leadership

Global differentiation

Global segmentation

protected markets
Protected Markets

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

national responsiveness
National Responsiveness

Focuses on adapting strategy to each local market

case analysis

Case Analysis

MTV v/s Channel V

case overview
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
launch approach
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
strategic approach
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
india
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
china
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
strategy reach and distribution
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
going beyond
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
licensing and merchandising
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 50000 homes
    • Poor logo
    • Lack of brand equity as compared to MTV
others
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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