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Business Marketing Strategies for Global Markets

Business Marketing Strategies for Global Markets. Chapter 8. Capturing Global Advantage. What are RDEs? Why are they important?. Sources of Global Advantage. Three major types of advantages Cost advantages Market access advantages Capabilities advantages. Cost Advantages.

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Business Marketing Strategies for Global Markets

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  1. Business Marketing Strategies for Global Markets Chapter 8

  2. Capturing Global Advantage • What are RDEs? • Why are they important?

  3. Sources of Global Advantage • Three major types of advantages • Cost advantages • Market access advantages • Capabilities advantages

  4. Cost Advantages • 20-40% savings in landed costs • What are landed costs? • Lower Operating Costs • Wage differences • Business process outsourcing • Lower Capital Costs • Capital and equipments costs • 30% savings • Hidden costs

  5. Market Access Advantages • Access to Growing Markets • China • Following customers

  6. Capabilities Advantage • Gain knowledge and skills • China and India • How does this help? • Improve R&D • Address unmet consumer needs • Tailor products to local market

  7. To Outsource or not to Outsource? • THAT is the question • To outsource: • To not outsource:

  8. International Market Entry Options • Exporting • Contracting • Strategic Alliances • Joint Venture

  9. Market Entry Options • Exporting • Goods are produced ___________ • Sales are made through __________________ • Lowest commitment and risk • Disadvantages

  10. Market Entry Options • Contracting • Two types • Licensing • What can be licensed? • Advantages • Disadvantages • Management contracts • Turnkey operations

  11. Market Entry Options • Strategic Alliances • “Collaborations among partners involving the commitment of capital and management resources with the objective of enhancing the partner’s competitive positions.” • Advantages • Disadvantages

  12. Market Entry Options • Joint Ventures • Why? • Advantages • Disadvantages • Choosing a Mode of Entry • Factors

  13. Multidomestic v. Global • Multimdomestic • Global

  14. International Strategy and the Value Chain • Primary activities • Upstream • Downstream • Competitive Advantage • Downstream • Upstream • Coordination • Configuration

  15. General Framework • Build a Unique Competitive Position • Emphasize a Consistent Positioning Strategy • Establish a Clear Home Base for Business • What’s a home base? • HP • Leverage Product Line Home Bases at Different Locations

  16. General Framework • Disperse Activities to Extend Home Base Advantages • Purchase from cost-effective vendors • Improve market access • Tap competitive advantages in other places • Coordinate and Integrate Dispersed Activities • Establish clear global strategy • Develop info and accounting systems • Encourage personal relationships • Rely on incentive systems

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