Professional Documents
Culture Documents
International
Finance
Features :-
1.Economies of scale through volume transactions
2.Dominated by MNC’s from Developed / Industrialised countries
• Worldwide contacts
• Economic & efficient operations
• Global approach
1.Trade barriers
• Tariff barriers
• Forex regulations
• Trade blocs
1.Sensitive to changes
2.Need for research
• Policy changes, substitutes, restrictions
6. Importance of Advanced Technology
• Superior quality goods at competitive prices
• Promote exports , capture world mkts
7. Fierce competition
• Competiton betn developed & developing
countries
• Facilities, incentives for export promotion
• Competitive techniques
• Regular research
8. Support of Spl institutions
• Complicated procedures
• Requirement of professional experts
• Fund support from fin inst
STAGES OF INTERNATIONALISATION :
• It includes 5 stages :
1. DOMESTIC COMPANY-
• Limits its operations, mission, vision to national political
boundaries
• Cos focus its view on-
– domestic mkt opportunities,
– domestic suppliers,
– domestic financial cos,
– domestic customers
• Cos analyse natl environment
– Formulate strategies to exploit opportunities
– Motto is “ if its not happening in home country ,it is not happeneing”
• Never thinks of going global
• Selects diversification strategy if there’s growth beyond
capacity
2.INTERNATIONAL COMPANY.-
• Domestic cos having growth beyond
prodn & mkting capacities
• Decide to exploit opportunities outside
domestic country
• These cos remain ethnocentric
• Believe that domestic biz , people,
products are superior to others
• Focus is on domestic but extend to
foreign countries
• Select foreign mkt and extend same
domestic operations
• Most of the cos. Follow this strategy due
to-
– Ltd resources
– to learn the process of going global without
much risk
• It extends the domestic country mkting
mix & biz model & practices to foreign
countries
3. MULTINATIONAL COMPANY :
• Cos turn multinational when they start
responding to needs of different country’s
market
• Also termed as multidomestic
• Formulates different strategies for
different markets i.e ethnocentric to
polycentric
• The offeces/branches/subsidiaries work
like domestic co. in each country with
distinct policies suitable to that country
• Ex. Philips (Netherlands)
4. GLOBAL COMPANY :
• is the one having global marketing
strategy
• Either produces in home country/ single
country
• Focusses on marketing these products
globally/ produces the products globally &
mkt these products domestically
• Ex. Harley produces motor cycles in USA
& mkts globally. Dr.Reddy’s Labs
5. TRANSNATIONAL COMPANY:-
• Produces , markets, invests & operates
across the world
• Its an integrated global enterprise which
links global resources with global mkts at
profit
• There is no pure TNC
CHARACTERISTICS-
1.geocentric
2.Collect data & info worldwide regardless of
boundaries
3.Vision & aspiration are global, global mkts,
global customers
4. Analyse global opportunities regarding-
– Availability of resources
– Customers
– Mkts
– Technology
–R & D
5. Operating style-
– Globalise functions like-
• R&D
• Product development
• HRM
• Procured of high valued material
6.Adaptation : products, mkt & functional
strategies
7. Products do not require any
change,they’re an extn ex.
Calculators,lighters
8.HRM policy
9.purchasing
Drivers of International
Expansion
• Competition
• Regional Economic and
Political Integration
• Technology
• Improvements in Transportation and
Telecommunication
• Economic Growth
• Transition to Market Economy
• Converging Consumer Needs
Drivers of International
Expansion, continued
COMPETITION
• McCann Erickson, the
advertising agency,
follows longtime
client, Coke, to all
countries where
company is present
Drivers of International
Expansion, continued
REGIONAL, ECONOMIC and POLITICAL
INTEGRATION
• Regional agreements such
as NAFTA, and the European
Union lower and eliminate
barriers and promote trade
within common markets.
• Subsidiaries are established
in specific markets to take
advantage of free trade
within the region.
Drivers of International
Expansion, continued
TECHNOLOGY
• Consumers
worldwide are
exposed to similar
products, services,
and entertainment.
• The Web and the
Internet have
revolutionized the
way companies
conduct business.
Drivers of International
Expansion, continued
Political/legal 1 Economic
forces forces
Domestic environment
(uncontrollable)
2
7
Political/ Competitive Competitive
Cultural
legal (controllable) structure Forces
forces
forces
Price Product
3
Channels of
Promotion
distribution
6
Level of
Geography
Technology
and Economic climate
Infrastructure
4
5
Structure of
distribution
The activities in international
marketing include:
1. Detailed analysis of current markets and
potential markets;
2. Planning and development of products
that the consumers want, clearly defined in
suitable package;
3. Distribution of products through channels
which provide the services or conveniences
demanded by purchases;
The activities in international
marketing include:
4. Promotion of products to inform
and educate consumers about
products or services;
5. Setting of prices which reflect both
a reasonable value (or utility ) of
product to consumers; and
6. Technical and non-technical
services given to the consumers-both
before and after a sale is made.
What is International
Marketing
• Made up of many facets, that is levels
of involvement
Product
Do not change Adapt Develop new
product product product
Do not change
Promotion
promotion
Straight Product
extension adaptation
Product
invention
Communi- Dual
Adapt cation adaptation
promotion adaptation
03/09/98
Market Entry Strategies
• Exporting • Joint venture
– Low investment – Considerable investment
– Low control of – More control
promotion – Able to benefit from
• Licensing partner’s experience
– Must work with partner
– Low investment
– Low control of • Direct investment
promotion, positioning, – Large investment
and quality – Risky
– Able to benefit from – Greater control
existing distribution and – May lack knowledge of
market knowledge market