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Definition:
Globalization has been defined in business schools as the production and distribution of products and services of a homogenous type and quality on a worldwide basis. Why? the fact that foreign sales account for more than 50 per cent of the annual revenues of companies such as Hewlett Packard, IBM, Johnson and Johnson, Mobil, Motorola, Procter & Gamble, etc..
Yesterdays Globalism
In yesterdays one-size-fits-all world, big companies could often migrate something that was a hit in the U.S. or Europe by tweaking the language and advertising . Examples: Mercedes-Benz, traded on its reputation for building highly engineered automobiles to drive into foreign markets. Coca-Cola Co. and Marlboro cigarettes traded on their Americanness to create large overseas followings. Sony Corp. found that compact, economical, and reliable electronics like the Walkman, struck a chord with people everywhere.
Todays Globalism
Things have changed. No company can safely assume there will be viable foreign markets for an existing product. Any company seeking to expand globally needs to ask if its offerings are culturally and socially appropriate for its targeted market.
Initial set backs in 80s the benefits of global integration are sought and the need to adapt products to local markets is largely ignored.
Coke is instituting a strategy of think local, act local by putting increased decision making in the hands of local managers.
Make model citizen by reaching out to the local communities and getting involved in civic and charitable activities.
Before : workers were required to speak English, even if most people in attendance were French. liquor was not sold in the park, they have a drink with lunch or dinner. many of the exhibits and rides did not have a local theme, they were the same as those in Disneyland USA and thus did not appeal to Europeans.
series of changes, abandoning its global approach, and substituting one that appealed to local tastes.
Procter & Gamble (P&G) with annual sales of almost $40 billion has operations in virtually every country of the world. Trick: the firm employs a strategy that combines high national responsiveness with high economic integration. strategies being developed and implemented locally and/or regionally. In particular, product delivery and marketing are local. the back office of payroll, financing, human resource management and other general services and processes is coordinated on a more global basis, in order to achieve internal economies of scale.
The Kingfisher Group, a British retail enterprise with annual sales of over $10 billion, was founded in 1989.
retail is detail and local knowledge is vital. The approach that is used in managing these geographically dispersed operations
Two general types of research that companies use to understand new markets 1. product-focused research: asks consumers through surveys, focus groups, interviews, home visits and usability tests, about existing or prototypical products and services.
2.
culture-focused research: uses measures like census-taking and demographic data, to look at general patterns of daily life like value systems, social structures, and relationships among friends and relatives.
the product research that is practical but does not lead to new insights the culture research that leads to major insights that are difficult to apply Of course, the answer is that companies usually do some of both and hope for the best.
Activity focussed research focusing on peoples activities when they are using a product or service a company wants to develop.
Which market do we want to access. Take macro and micro data to make a segmentation decisions on these markets and choose our priorities. How can we modify our product to make more attractive to each sepate group: you can change. Performance levels Design Support Speed of services Packagining Positioning Price? Can we position ourselves as being the best where there are many others to choose from?
Tips
Do not assume an integrated global market. be prepared to design strategies that take into account regional trade and investment agreements. Encourage all your managers to think regional, act local and forget global! Develop new thinking and knowledge about regional business networks and assess the similar attributes of competitors, rather than always developing pure global strategies. The foreign market is not always the same as your home market. Make alliances and foster cross-cultural awareness. When global brands target their regional markets using the appropriate economic integration/national responsiveness, they tend to be successful.